REPORT 


OF  THE 


imission  on  Land  Colonization 
and  Rural  Credits 


OS1  THE 


State  of  California 


CALIFORNIA  STATE  PRINTING  OFFICE 
3ACBAMENTO 
1916 


REPORT 


OF  THB 


OF  THB 


State  of  California 


NOVEMBER  29,  1916 


CALIFORNIA  STATE  PRINTING  OFFICE 
SACRAMENTO 
1916 


27025 


LETTER  OF  TRANSMITTAL 


November  29,  1916. 
To  His  Excellency,  HIRAM  W.  JOHNSON,  Governor, 

State  Capitol,  Sacramento,  California: 

Your  commission  appointed  to  ' '  investigate  and  consider  the  question 
of  land  colonization  and  the  various  forms  of  land  banks,  cooperative 
credit  unions,  and  other  rural  credit  systems  adopted  or  proposed  in  this 
country  or  elsewhere,  with  especial  view  to  the  needs  of  the  rural  com- 
munities of  this  state, ' '  has  the  honor  to  transmit  herewith  its  report. 
Respectfully, 

ELWOOD  MEAD,  Chairman. 
HARRIS  WEINSTOCK. 
DAVID  P.  BARROWS. 
MORTIMER  FLEISHHACKER. 
CHESTER  ROWELL. 
DAVID  N.  MORGAN,  Secretary. 


REPORT  OF  THE  COMMISSION  ON  LAND  COLONIZATION  AND 

RURAL  CREDITS 

INTRODUCTION 

The  legislature  of  California,  in  1915,  passed  a  law  providing  for 
a  commission  to  "Investigate  and  consider  the  question  of  land  coloni- 
Investigation  zation,  and  the  various  forms  of  land  banks,  cooperative 
provided  for  credit  unions,  and  other  rural  credit  systems  adopted  or 
proposed  in  this  country  or  elsewhere,  with  especial  view  to  the  needs 
of  the  rural  communities  of  this  state."  In  accordance  with  this 
measure  the  following  report  has  been  prepared. 

Within  the  last  five  years  questions  of  land  tenure  and  land 
settlement  have  assumed  a  hitherto  unthought  of  importance  in  the 
Importance  of  United  States.  The  causes  for  this  are  the  disappear- 
land  settlement  ance  of  free,  fertile  public  land;  the  rising  prices  of 
in  America  privately-owned  farm  lands;  the  increase  in  tenant 

farming  and  a  clearer  recognition  of  its  dangers;  and  the  increasing 
attractions  of  city  life  which  threaten  the  social  impairment  of  rural 
communities  by  causing  young  people  to  leave  the  farms. 

Some  of  the  most  enlightened  nations  of  the  world  have  gone  far 
toward  solving  the  problems  created  by  such  undesirable  conditions  by 
In  other  the  adoption  of  new  attitudes  on  the  part  of  the  govern- 
countries  ment  towards  land  ownership  and  land  settlement.  In 
such  countries  the  state  has  taken  an  active  part  in  subdividing  large 
estates  and  in  creating  conditions  which  will  enable  farm  laborers 
and  farmers  of  small  capital  to  own  their  homes.  They  have  adopted 
this  policy  because  experience  has  shown  that  nonresident  ownership 
and  tenant  farming  are  politically  dangerous  and  socially  undesirable ; 
that  ignorant  and  nomadic  farm  labor  is  bad;  and  that  the  balance 
between  the  growth  of  city  and  country  can  be  maintained  only 
through  creating  rural  conditions  which  will  make  the  farm  as 
attractive  as  the  office  or  factory  for  men  and  women  of  character 
and  intelligence. 

The  state  of  California  has  had  no  state  land  settlement  policy. 
The  subdivision  of  land  for  settlers,  the  character  of  settlers  sought, 
No  state  land  and  the  kind  of  agriculture  created,  as  well  as  the  con- 
settlement  policy  ditions  of  purchase,  have  all  been  left  to  unregulated 
m  California  private  enterprise.  There  has  been  no  public  control 
over  the  selection  of  colonists  to  insure  that  they  would  be  effective 
agents  in  rural  development.  There  has  been  no  public  scrutiny  of 
soil  and  conditions  of  purchase  to  render  it  certain  that  colonists  would 
find  an  opportunity  here  rather  than  a  temptation. 


6  LAND   COLONIZATION   AND   RURAL    CREDITS. 

The  task  of  this  commission  has  been  to  study  the  methods  and  the 
results  of  private  colonization  in  California  in  recent  years,  and  to 
Purpose:  study  compare  these  with  what  is  being  accomplished  in 
methods  and  countries  where  land  settlement  is  being  carried  out 
results  of  private  under  state  aid  and  direction.  In  gathering  data 
colonization  regarding  local  development,  the  endeavor  has  been 

to  get  as  much  first-hand  information  as  possible.  Statements  have 
been  taken  from  a  great  many  settlers  in  nearly  all  the  sections  of  the 
state  where  colonization  has  been  active  in  recent  years.  Conferences 
have  been  held  with  men  active  in  colonization  matters,  and  with  com- 
mercial bodies  interested  in  the  results  of  settlement.  It  is  believed 
that  the  information  gathered  is  sufficiently  authentic  and  extensive 
to  enable  us  and  the  public  to  reach  definite  conclusions. 

In  this  report  the  results  of  the  investigations  have  been  arranged 
under  five  heads. 

(1)  Conditions  in  California. 

(2)  The  methods  of  land  settlement  enterprises  and  the  con- 

ditions of  settlers  in  colonies  recently  established. 

(3)  The  problems  of  tenantry  and  farm  labor. 

(4)  Methods  and  policies  of  other  countries. 

(5)  Conclusions  and  recommendations. 


LAND    COLONIZATION   AND    RURAL    CREDITS. 


PART  I 

CONDITIONS   IN   CALIFORNIA 

ARRESTED  RURAL  DEVELOPMENT 

The  state  has  an  immense  area  of  fertile  and  unpeopled  land.  Only 
eleven  million  acres  out  of  the  twenty-eight  million  acres  of  farm  land 
Few  settlers  are  being  cultivated.  However,  comparatively  few 
coming  to  settlers  are  coming  here,  and  many  who  came  in  recent 

California;  many  years  have  left.  Costly  advertising  and  still  more 
have  left  costly  personal  solicitations  have  not  served  to  attract 

colonists.  The  result  is  that  progress  in  the  country  is  not  keeping 
pace  with  progress  in  the  city.  During  five  years,  from  1910  to  1915, 
the  gain  in  the  population  of  California  cities  and  towns  was  three 
times  the  gain  of  the  country. 

The  principal  causes  for  this  arrested  development  seem  to  be  high 
prices  of  land,  high  interest  rates,  and  short  terms  of  payment  given 
Causes  of  in  colonization  contracts.  These  make  it  practically 

arrested  impossible  to  earn  the  money  required  to  pay  for  a 

development  farm  out  of  the  soil  in  the  time  usually  given.  Many 
complain,  moreover,  that  opportunities  have  been  so  exaggerated  and 
the  expenses  of  developing  a  farm  so  minimized  as  to  induce  settlers  to 
undertake  what  on  trial  has  proved  to  be  impossible. 

It  is  to  the  interest  of  the  whole  state  that  its  fertile  lands  should 
be  cultivated  and  that  active  colonization  should  be  promoted.  The 
More  settlers  and  s*ate  now  buys  a  large  part  of  its  meat  and  many 
subdivision  of  other  farm  products  abroad.  Increased  production 
large  tracts  the  would  lessen  the  cost  of  living  and  keep  at  home 
cure  for  arrested  money  now  sent  to  other  sections  to  pay  for  food 
products.  Moreover,  great  properties,  owned  by  non- 
residents, are  being  cultivated  by  tenants  or  by  nomadic  and  unsatis- 
factory hired  labor.  These  great  properties  ought  to  be  subdivided 
and  cultivated  by  residents.  From  statistics  furnished  by  C.  L.  Seavey, 
tax  commissioner,  it  appears  that  310  landed  proprietors  own  over 
four  million  acres  of  land  suited  to  intensive  cultivation  and  capable 
of  supporting  a  dense  population.  This  would  make  100,000  forty-acre 
farms.  One  firm  owns  nearly  one  million  acres;  one  railroad  owns 
500,000  acres.  In  Kern  County  four  companies  own  over  1,000,000 
acres,  or  more  than  half  the  land  in  private  ownership.  The  Kern 
County  Land  Company  alone  owns  356,000  acres.  In  Merced  County 
Miller  &  Lux  own  245,000  acres.  The  evils  of  such  ownership  are 
every  year  becoming  more  apparent.  We  have  at  one  end  of  the  social 


8  LAND    COLONIZATION   AND   RURAL    CREDITS. 

scale  a  few  rich  men  who  as  a  rule  do  not  live  on  their  estates,  and  at 
the  other  end  either  a  body  of  shifting  farm  laborers  or  a  farm  tenantry 
made  up  largely  of  aliens,  who  take  small  interest  in  the  progress  of 
the  community.  Political  stability,  the  best  results  in  agriculture,  and 
satisfactory  social  conditions  require  that  this  inheritance  from  a 
Mexican  land  system  and  former  land  laws  of  the  United  States  be 
abolished. 

PUBLIC  HEARINGS  OP  THE  COMMISSION 

The  Commission  on  Land  Colonization  began  its  investigations  in 
1915  with  a  series  of  public  hearings  at  Sacramento,  Willows,  Stockton, 
San  Francisco,  Fresno,  Los  Angeles,  and  El  Centro.  At  these  hearings 
much  attention  was  given  to  the  need  for  a  better  system  of  rural 
credits  as  the  Federal  Farm  Loan  Act  had  not  then  been  enacted. 

The  meetings  were  well  attended.  Valuable  first-hand  knowledge, 
based  on  personal  experience,  was  furnished  by  landowners,  settlers, 
Conclusions  public  officials,  bankers,  and  representatives  of  commercial 
drawn  from  organizations.  There  was  a  general  agreement  that  set- 
first-hand  tiers  were  finding  it  difficult  to  meet  their  payments  on 
knowledge  jan(j  an(j  ^at  coionization  would  be  easier  and  safer  if 
longer  periods  of  time  for  payments  and  lower  rates  of  interest  could 
be  secured.  The  testimony  showed  that  the  cost  of  preparing  land 
for  cultivation,  especially  in  the  irrigated  districts,  is  more  than  has 
been  recognized,  and  that,  because  of  this,  it  is  impossible  for  settlers 
to  borrow  money  to  equip  farms  properly  for  intensive  cultivation. 

THE  FEDERAL  FARM  LOAN  ACT 

While  this  investigation  was  in  progress,  congress  passed  the 
" Federal  Farm  Loan  Act,"  which  will  give  farmers  who  own  land 
Farm  Loan  Act  as  favorable  conditions  for  borrowing  money  as  could 
about  to  be  be  expected  under  a  state  law.  A  board  which  has 

put  in  force  been  appointed  to  administer  the  federal  act  is  arrang- 

ing to  begin  business  in  the  near  future.  Since  nothing  could  be  gained 
either  in  time,  conditions  of  payment,  or  in  rates  of  interest  by  the 
enactment  of  a  state  law,  it  seemed  desirable  that  our  future 
investigations  should  deal  mainly  with  methods  and  policies  of  land 
settlement. 

The  benefits  of  the  Federal  Farm  Loan  Act  are,  however,  restricted 
to  farmers  who  can  give  first  mortgage  security  on  land  worth  double 
But  separate  *ne  amount  °f  the  loan.  It  is  generally  conceded 

credit  system  that  in  order  to  enable  tenant  farmers  to  become 
must  be  provided  farm  owners,  or  in  order  to  give  adequate  assistance 
to  colonists  of  small  capital,  a  separate  credit  system 
based  in  some  measure  on  the  character  of  the  borrower  must  be  pro- 
vided. A  federal  measure  known  as  the  Grosser  Bill,  designed  to 


LAND   COLONIZATION   AND   RURAL    CREDITS. 

finance  settlers  on  public  land,  is  now  pending  in  congress.  But  this 
will  not  help  to  colonize  private  land  in  California.  On  the  contrary, 
it  will  be  an  obstacle  to  colonization  here,  through  creating  more 
favorable  opportunities  elsewhere.  It  seemed  necessary,  therefore, 
that  this  investigation  give  considerable  attention  to  the  amount  of 
money  needed  by  settlers;  the  time  required  to  earn  that  money  by 
farming ;  the  terms  and  conditions  under  which  land  is  sold  to  settlers 
here;  and  the  terms  and  conditions  under  which  land  is  sold  in  coun- 
tries in  which  a  state  system  of  land  settlement  has  been  in  operation 
long  enough  for  the  benefits  to  be  manifest. 


10 


LAND   COLONIZATION   AND   RURAL    CREDITS. 


PART  II 

METHODS  OF  LAND  SETTLEMENT  ENTERPRISES 
AND  EXPERIENCES  OF  SETTLERS 

STUDY  OP  TYPICAL  COLONIES 

The  public  hearings  of  the  commission  were  followed  by  a  study  of 
conditions  in  what  were  regarded  as  typical  colonies.  Settlers  in 
The  colonies  these  were  seen  on  their  farms.  Data  were  procured 
studied  from  land  selling  agencies  and  commercial  bodies,  and  a 

number  of  special  investigators  visited  the  following  colonies  or  sections 
and  studied  conditions  in  them: 


Colony  or  project 

Atascadero 

Carmichael 

Chowchilla 

Clay 

Clovis 

California  Traction  Colonies 

Fairmead 

Fontana  Subdivision 

Kerman 

Imperial  Valley 

Laguna  de  Tache 

Laton 

Lemoore   (north  of,  on  "island"). 
Little  Landers  Colonies— 


Los  Molinos 

Merced 

Modesto 

Montague 

Oakdale  Irrigation  District 

Orland 

Patterson 

Rio  Linda 

Placer  County  Fruit  Belt 

Paul  Rossier  Colony 

Shafter 

Turlock  Irrigation  District 

Van  Nuys 

Wasco 

Willows  (Sacramento  Valley  Irrigation  Company) 

Winton 

Tuba  City 

Delta  Lands- 


County 

San  Luis  Obispo 
Sacramento 
Madera 
Sacramento 
Fresno 

Sacramento  and  San  Joaquin 
Madera 

San  Bernardino 
Fresno 
Imperial 
Fresno 
Fresno 
Fresno 
San  Diego,  Los  Angeles,  and 

Alameda 
Tehama 
Merced 
Stanislaus 
Siskiyou 
Stanislaus 
Glenn 
Stanislaus 
Sacramento 
Placer 
Nevada 
Kern 

Stanislaus 
Los  Angeles 
Kern 

Glenn  and  Colusa 
Merced 
Yuba 
San  Joaquin 


LAND   COLONIZATION   AND    RURAL    CREDITS.  11 

In  its  studies  the  commission  has  had  the  valuable  cooperation  and 
aid  of  the  Commonwealth  Club  of  California.  Recognizing  the  economic 

«     significance    of    land    settlement,    the    club    set    aside 
Cooperation  ot 

Commonwealth  $1,000  to  help  meet  the  expenses  of  these  studies.  A 
Club  special  section  of  the  club  has  given  much  attention 

to  the  subject.  Three  members,  Messrs.  Frank  Adams,  D.  N.  Morgan 
and  Elwood  Mead,  were  made  a  special  committee  to  direct  the  investi- 
gation on  behalf  of  the  Commonwealth  Club ;  and  Messrs.  A.  L.  Cowell, 
Edwin  E.  Cox,  R.  L.  Adams  and  M.  S.  Wildman  have  carried  on 
special  inquiries  and  submitted  reports,  which  are  referred  to  later. 

Fifteen  students  of  the  University  of  California,  either  graduates 
or  members  of  the  senior  class,  have  aided  in  field  studies.  Many  of 
Aid  by  these  young  men  had  been  raised  on  California  farms  and 
students  nearly  all  had  had  farming  experience.  They  were  well 
equipped,  therefore,  to  aid  in  gathering  information  and  in  inter- 
preting its  significance. 

It  has  been  the  practice,  followed  in  nearly  all  instances,  to  have 
the  settlers'  statements  supplemented  by  a  study  of  conditions  in  the 
Settlers'  statements  colonies,  either  by  a  member  of  the  commission  or 
supplemented  by  some  one  else  having  experience  and  maturity 

by  study  of  Of  judgment  to  prevent  the  publication  of  anything 

misleading  or  incorrect.  One  or  two  of  the  special 
reports  made  for  the  commission  have  been  incorporated  with  ours, 
because  of  the  side  lights  they  throw  on  some  of  the  special  problems 
of  colonization  and  rural  development. 

The  colonies  or  sections  included  are  believed  to  be  fairly  typical. 
The  settlers'  experiences  represent  on  an  average  the  methods  and  the 
results  of  recent  colonization. 

In  order  to  secure  uniformity  in  statements  and  to  be  able  to  com- 
pare results  in  different  sections,  the  commission  prepared  a  form  of 
Typical  settlers'  inquiry  concerning  the  essential  facts  of  the  settlers' 
statements  operation  during  the  developing  period.  A  copy  of 

one  of  these  statements  is  inserted  to  show  their  character. 

STATEMENT  OF  SETTLER. 

For  information  of  Cooperative  Land  Settlement  Investigations  being 
jointly  conducted  "by  the  Commonwealth  Club  of  California,  the  California 
State  Commission  on  Rural  Credits  and  Land  Colonization,  and  the  University 
of  California. 

Name  —  Post  office 

Age      47  Year  of  settlement      1912 

Occupation  prior  to  purchasing  farm       Farming — Minnesota 

If  married,  number  in  family,  with  ages  of  children    2  children  aged  17  and  20 

Area  in  farm,  acres  20     Area  cultivated,  acres  20     Area  cultivable,  acres 

Capital  at  time  of  purchase  :  Cash      $7,000          Equipment 

Real  estate  $ Other  capital  $ Total  $ 


12  LAND   COLONIZATION    AND   RURAL    CREDITS. 

(Purchase  price  of  land,  per  acre   #300   Terms  of  purchase :  Cash   1/5 — $1,200 
Time  allowed  for  future  payments,  years     10         Interest  rate,  per  cent     6 

What  improvements  on  farm  when  purchased      None 

Estimated  total  value  of  these  improvements  $ 

Cost  of  improvements  made  since  purchase: 

House       $1,600         Barn       #600         Outbuildings       #400         Well       $100 

Fences  $ Corral       #25        Clearing  land  $ 

Leveling    and    checking    land       #300        Seeding        #68        Orchard        #75 
Family  garden  $ All  other  improvements  $ 

Amount  spent  annually,  by  years  on  improvements  itemized  above : 

First  year       #3,142       Second  year  $ Third  year       #50 

Later  years  $ Total      #3,192 

Estimated  cost  of  all  necessary  improvements  when  completed,  including  those 
already  made  $ 

Cost  of  farm  equipment : 

Farm  implements  and  tools       #200  Horses       #325  Cows  #.7,200 

All  other  live  stock  #40    Household  furniture  #200    All  other  equipment  #120 

Acreage  brought  into  production  by  years  and  crops : 

Acreage  Crop 

First  year 16%  alfalfa 

Second  year 20  alfalfa 

Third  year 

Fourth  year 

Fifth  year 

1915 20  alfalfa  $600 

Number  of  years  required  to  bring  your  land  into  complete  production      1 
Present  value  of  land  per  acre,  including  improvements      #500 
Stock  census  of  1915  : 


Dairy  cattle      

Number 
10 

Total  market 
value  in  1915 

#800 

Gross  returns 
in  1915 

#800 

Beef  cattle 

Hogs 

6 

#60 

#60 

Poultry 

50 

#25 

couldn't  say 

Horses 

2 

#325 

Other    . 

Present  indebtedness : 

Amount  When  payable  Interest  rat* 

Bank  loan,  unsecured #200  1917  8  per  cent 

Private  loan,  unsecured 

Mortgage  on  land  or  stock 

Have  you  had  difficulty  in  borrowing  money  for  the  improvement  or  equipment 
of  your  farm?  None 

Rate  of  interest  you  think  you  could  afford  to  pay  (a)  for  long  term  loans 
5  per  cent  (6)  for  short  term  loans  6  per  cent 

Time  needed  to  repay  (a)  long  term  loans    10       (6)     short  term  loans    4-5 

What  payments  are  you  now  able  to  make  on  your  indebtedness,  and  how 
many  years  do  you  think  it  will  require  to  complete  your  payments?  Will 
pay  out  on  time.  Regular  payments. 

State  number  of  acres  you  think  a  farm  should  contain  to  be  a  living  area: 
(a)  for  fruit  growing  10  (6)  for  dairying  20  (c)  for  general  farm- 
ing under  irrigation  JtO  (d)  for  general  farming  without  irrigation 

State  amount  of  capital  you  think  settler  should  have  to  undertake  the  pur- 
chase, improvement,  and  equipment  of  each  of  the  above  areas  (a)  for  fruit 

growing  $ (ft)  for  dairying  #5,000  (c)  for  general  farming 

under  irrigation  #3,000  (d)for  general  farming  without  irrigation  # 

If  you  have  had  outside  income  during  period  covered  by  this  report,  please  give 
particulars  and  state  amount  #500  in  the  last  three  years 


LAND   COLONIZATION   AND   RURAL   CREDITS.  13 

Remarks:  (Here  please  add  any  additional  data  regarded  as  important, 
including  what  you  may  have  to  say  about  your  present  outlook  for  success 
not  covered  in  report) 

The  land  was  sold  at  too  high  a  price.     It  is  worth  about  $150  to  $200 

an  acre.     Mr. is  treating  the  settlers  fairly  and  has  been  of  great 

help  to  them.  I  bought  from  the  Company  and  am  con- 
tented and  expect  to  succeed.  To  irrigate  this  country  requires  a  large 
amount  of  water.  In  my  case  from  3  to  31/2  acre  feet  per  acre. 

STATISTICS  OF  COLONIZATION  IN  CALIFORNIA 

Table  I  is  a  financial  summary  of  the  settlers'  statements  in  colonies 
investigated.  Table  II  shows  the  estimated  outlay  of  settlers,  furnished 
the  commission  by  commercial  organizations.  Table  III  gives  a  sum- 
mary of  the  terms  on  which  land  may  be  bought  in  countries  which 
have  a  state  land  settlement  policy  and  the  average  of  terms  in  the 
colonies  studied  here.  Table  IV  indicates  the  ages  of  settlers  and  the 
value  of  crops  grown  the  first  year  after  settlement.  Table  V  indicates 
land  prices. 


14 


LAND    COLONIZATION    AND   RURAL    CREDITS. 


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LAND    COLONIZATION   AND   RURAL    CREDITS. 


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LAND   COLONIZATION   AND   RURAL    CREDITS. 


17 


TABLE  III. 

Rate  of  Interest  and  Time  Given  to  Pay  for  Land   Under  Colonization  Systems 

of   Different  Countries. 


Country 

Rate  of  Interest,  per  cent 

Time  given  to 
pay  for  land  or 
repaying  loan 

3  to  4                   —    

65    years. 

Italy 

2.5      

50    years. 

Holland                                              

4.7     -  — 

3.5  to  buy  land  and  4  to  owners    _ 

Hungary              

4    

50    years. 

4    to    4.5 

54J  years. 

Russia                                   

4.5  principal   and   interest  

55J  years. 

Germany             

3.5  to  4  

56J  years. 

France 

4   to   4.5  _. 

75    years. 

England                    

4    ..     

50    years. 

Ireland 

3.5        —        —        —        _.               „ 

68    years. 

Belgium 

4.5             

30    years. 

Switzerland 

4.5     ...             .      .              .... 

57    years. 

New  Zealand            ._ 

4 

36i  years. 

Victoria,   Australia  

4.5         —  --  -  

36i  years. 

New  South   Wales    

3    to    5 

30  to  40  years. 

Other  Australian  states    

4    to    5                                                     .    . 

30  to  40  years. 

British  and  German  South  Africa-- 

4          

Chile    

4    

33    years. 

Argentine  .  ..  . 

4                  „    „ 

British  Columbia  

1  per  cent  more  than  the  interest  on  state 

bonds;  5  per  cent  at  present  

36J  years. 

California     . 

6  to  10— 

3  to  8  vears. 

TABLE  IV. 

Summary    of   Ages   of   Settlers    and    of   Gross    Returns   for   the    First   Year   for 
Nineteen  California  Projects. 


Name  of  colony 

Number 
of  settlers 
Inter- 
viewed 

Average  age 
of  colonists 
at  date  of 
settlement 

Average  gross 
value  of 
production, 
first  year 

Average  gross 
return  per  acre, 
first  year 

Carmichael 

23 

43.7 

Orchard 

Orchard 

Chowchilla       -  - 

77 

41.5 

$279 

$5.70 

Clovis    —  

18 

44.8 

307 

Orchard  and  vineyard 

Fontana 

9 

40.1 

Orchard 

Orchard 

Kennan  

50 

46.5 

204 

$6.85 

Kuhn 

18 

46 

123 

3.34 

Laguna  de  Tache..    -- 

27 

42.9 

357 

12.20 

Laton    _ 

31 

43 

526 

9.88 

Los  Molinos  .  

20 

43.6 

284 

11.71 

Oakdale    

42 

44.3 

131 

4.64 

Patterson    

128 

42.7 

193 

7.36 

Rio  Linda 

26 

45  2 

Orchard 

Orchard 

Shatter     

29 

42  1 

231 

4.06 

Van   Nuys   

36.2 

Orchard 

Orchard 

Waseo    

59 

42.1 

201 

4.32 

Wilton    

45 

42.7 

77 

3.02 

Winton    

40 

46.2 

118 

4.74 

Yuba  City  „ 

76 

44 

758 

14.93 

Tucaipa    

4 

51  7 

Orchard 

Averages    . 

436 

270 

$7.13 

2—27025 


18 


LAND   COLONIZATION   AND   RURAL    CREDITS. 


TABLE  V. 
Average  Price   Per  Acre  of  Farm  Lands  in  the  United  States  1916. 


Division 

Improved 

Unimproved 

North  Atlantic  states    --                            ..              ...    .    ... 

$64  30 

$38  71 

South  Atlantic  states                                                            _        _  . 

38  02 

23  79 

North  central  east  of  Mississippi  River          .                    .. 

100  67 

74  95 

North  central  west  of  Mississippi  River  

78  21 

59  68 

South  central  

33  38 

24  09 

Far  western      

102  58 

58  40 

California     _  _  _                       _        _        . 

180  00 

110  00 

Prices   Paid  for  Land   by   Colonists   in  Other  Countries. 


Country 

Average  price  per  acre 

Switzerland    . 

$254.23  (intensive 
$2.50  to  $175.73; 
$50. 
$150. 
$88.93. 
$95  to  $135. 
$21.01. 
$78.00. 
$60.00. 
$190.72. 
$260.97. 

holdings), 
average,  $7.60. 

Finland 

Ireland1    .  .         

Kngland                                                                „  .„„„„„„„     __ 

Denmark              •_    

Germany    

Russia    

Australia    (general    land)  . 

Victoria,    Australia    (irrigated   land)  

California  settlers'  statements-     

California  commercial  bodies'  statements  

NOTE. — Table  V  gives  the  prices  of  land  in  other  sections  of  the  United  States  as 
compiled  by  the  United  States  Department  of  Agriculture  in  1916,  and  the  prices  paid 
for  farm  land  in  other  countries  of  the  world  as  compiled  by  the  state  or  semi-public 
authorities  engaged  In  colonization.  In  Germany,  Ireland,  England,  and  Denmark, 
much  of  the  land  purchased  is  highly  improved,  with  costly  residences  and  farm  build- 
ings. The  land  in  Australia  is  cleared  and  fenced ;  it  is  in  about  the  same  state  of 
improvement  as  the  large  wheat  ranches  of  California. 


Summarized,  these  tables  show:  That  the  purchase  price  of  unim- 
proved land  is  higher  in  California  than  in  other  parts  of  the  United 
States  or  in  those  countries  which  have  a  state  system  of  land  settle- 
ment. This  does  not  reflect  on  the  desirability  of  California  land 
because  the  climate  makes  land  here  more  valuable  than  in  any  other 
part  of  this  country. 

What  it  does  show  is:  That  we  have  reached  a  period  in  our  devel- 
opment when  settlers  here  need  all  the  assistance  that  is  given  them  in 
Settlers  need  countries  which  have  adopted  state  aid  in  land  settlement 
assistance  as  a  public  policy. 

That  the  rate  of  interest  in  California  is  also  higher;  and  that  the 
settlers  in  countries  with  state  systems  have  from  four  to  ten  times 
Interest  too  high;  as  long  to  pay  for  their  land  as  have  the  settlers 
time  too  short  under  private  colonization  contracts  in  California. 


LAND    COLONIZATION   AND   RURAL    CREDITS.  19 

But  the  tables  do  not  tell  the  whole  story.  In  Ireland,  England, 
Denmark,  Germany,  Italy,  Australia,  and  South  Africa  the  settler 
Value  of  expert  ^s  given  expert  direction  and  competent  financial 
assistance  in  advice  in  making  his  initial  improvements.  This 

other  countries  enables  a  settler  to  bring  his  farm  into  full  produc- 
tion at  a  lower  cost  and  in  a  shorter  time  than  is  possible  where  each 
individual  must  make  his  initial  improvements  without  such  direction 
or  advice.  Organization  in  the  development  of  a  colony  and  prelim- 
inary training  or  direction  of  settlers  are  as  valuable  as  is  the  pre- 
liminary training  of  workmen  in  their  duties  in  a  great  industrial 
undertaking. 

CONDITIONS  OF  LAND  SELLING  CONTRACTS  IN  CALIFORNIA  SHOULD  BE 

MORE  LIBERAL 

The  comparison  of  land  prices  and  conditions  of  payment  here  and 
in  other  countries  raises  the  question,  "How  it  is  possible  for  settlers 
Settlers  of  limited  ^n  California  to  pay  for  farms  in  periods  of  from 
capital  are  not  three  to  ten  years,  while  in  other  countries  periods 
purchasing  land  of  from  thirty  to  seventy-five  years  have  been  found 
in  California  necessary."  The  answer  is  that  in  California  the 

settler  who  has  not  had  a  large  cash  capital  or  some  outside  income 
has  not  been  able  to  purchase  a  farm.  We  have  not  found  a  single 
settler  who,  bringing  with  him  only  the  limited  capital  accepted  by 
state  systems  in  other  countries,  has  been  able  to  pay  for  his  land  in 
the  time  agreed  upon  in  his  contract. 

The  experience  of  practically  every  colonization  company,  no  matter 
what  degree  of  success  it  has  attained,  shows  that  it  would  have  been 
Colonies  show  better  for  both  the  settler  and  the  company  if  the 
that  longer  terms  original  enterprise  had  been  organized  on  a  financial 
for  payment  basis  which  would  have  given  the  settler  more  money 

would  be  better  for  improvements  and  a  longer  time  in  which  to 
pay  for  his  farm. 

INFORMATION  ABOUT  SPECIFIC  COLONIES 

The  information  about  the  colonies  listed  below  has  been  obtained 
from  the  managers  and  confirmed  by  the  settlers: 

Los  Molinos.  This  colony  is  now  a  success.  A  majority  of  the 
settlers  have  overcome  the  obstacles  which  at  first  threatened  to  over- 
whelm them.  But  there  was  a  time  when  it  seemed  as  though  the 
enterprise  would  fail.  The  settlers  had  bargained  to  pay  a  high  price 
for  unimproved  land  in  the  short  period  of  seven  years.  In  addition 
to  meeting  land  payments  they  had  to  provide  the  money  for  improve- 
ments and  equipment,  which  on  small  irrigated  farms  are  very  heavy. 
The  operating  expenses  included  taxes  of  about  $3.00  an  acre,  water 


20  LAND    COLONIZATION   AND   RURAL    CREDITS. 

charges  of  $2.00  an  acre,  and  interest  on  land  which  cost  from  $75 
to  $300  an  acre.  The  amount  of  money  required  to  meet  the  payment 
of  interest,  principal,  and  taxes  was  somewhere  between  $35  and  $40 
an  acre.  At  the  outset  the  land  did  not  produce  anything  approaching 
this  sum. 

Fortunately,  the  company  which  founded  the  colony  had  financial 
resources  which  enabled  it  to  assist  the  settlers  by  buying  cows,  which 
cost  $60,000,  and  allowing  the  settlers  to  pay  for  them  by  giving  to 
the  company  one-half  of  each  cream  check.  Each  settler  paid  8  per 
cent  interest  on  the  loan. 

The  following  figures  show  to  what  extent  the  anticipated  payments 
of  settlers  have  not  been  made.  The  375  contracts  outstanding  at  this 
time  represent: 

$48,763  arrears  of  interest, 
$651,001  arrears  of  principal, 
$15,689  ledger  account,  and 
$13,446  unpaid  balance  on  purchase  of  cows. 

It  would  have  been  better  for  this  company,  and  certainly  better  for 
the  settlers,  if  the  original  contracts  had  given  the  settlers  time  to 
earn  out  of  the  land  enough  money  for  their  payments. 

Orland.  Few  settlers  of  limited  means  have  been  able  to  meet  their 
land  payments  and  some  have  had  to  borrow  money  to  meet  their 
water  charges.  Many  of  the  notes  given  to  banks  for  money  advanced 
to  pay  for  cows  are  overdue.  Settlers  have  asked  for  the  creation  of 
a  federal  farm  loan  association  in  order  to  obtain  thirty  years  time 
with  a  lower  rate  of  interest.  Orland  is  another  colony  which  is 
going  to  succeed.  But  progress  would  have  been  more  rapid  and 
settlers  would  have  been  relieved  from  a  heavy  burden  of  anxiety,  if 
the  time  of  payment  had  been  in  accord  with  the  profits  of  agriculture. 

Willows,  8.  V.  I.  Co.  The  testimony  taken  at  Willows  showed  that 
fully  90  per  cent  of  the  settlers  in  this  colony  are  behind  with  their 
payments.  The  reorganized  company  (Superior  California  Farm 
Lands  Company)  has  this  year,  voluntarily  and  generously,  given  all 
resident  colonists  new  contracts.  In  them  credit  is  given  for  all  pay- 
ments made  and  all  arrears  of  interest  are  written  off.  That  is,  many 
settlers  have  had  their  land  rent  free  for  several  years.  Many  others 
who  were  unable  to  wait  for  a  revision  of  the  contracts  have,  however, 
had  to  leave  the  colony,  losing  all  they  paid. 

Carmichael.  This  has  been  mainly  planted  to  orchards,  which  are 
not  yet  producing.  Few  settlers  have  a  living  income  from  the  land; 
a  considerable  number  earn  this  .by  working  for  wages.  If  strict 
compliance  with  contracts  had  been  insisted  upon,  very  few  resident 


LAND    COLONIZATION   AND   RURAL    CREDITS.  21 

colonists  would  be  left.  Many  who  have  made  no  payments  since  the 
first  have  been  given  more  time;  and  some  have  borrowed  back  the 
first  payments  to  carry  on  the  cultivation  of  their  orchards. 

Wilton.  The  settlers  in  this  colony  lacked  both  capital  and  experi- 
ence. Many  have  had  to  leave  because  they  lacked  capital  to  complete 
improvements  and  to  meet  deferred  payments  on  land.  Even  if  they 
bad  had  sufficient  capital,  success  would  not  have  been  possible  without 
irrigation.  No  facilities  for  irrigation  were  provided. 

Patterson.  In  the  Patterson  Colony  the  earlier  settlers  and  later 
ones  with  ample  capital  have  done  well,  but  the  capital  of  many  settlers 
was  absorbed  in  making  the  first  payment.  They  were,  therefore, 
unable  to  buy  stock  or  equip  their  farms.  A  large  number  have  given 
up.  Some  have  succeeded  because  they  rented,  at  a  nominal  rate,  the 
farms  of  nonresident  owners.  But  many  are  able  to  remain  only 
because  the  owners  of  the  colony  lands  are  not  insisting  on  payments 
in  accordance  with  their  contracts. 

The  Oakdale  District  Colonies.  There  are  twenty-seven  colonies  in 
the  Oakdale  irrigation  district.  Some  of  these  are  prospering.  In 
some  only  two  or  three  colonists  remain.  In  the  successful  colonies 
land  was  sold  at  a  reasonable  price  and  settlers  who  needed  it  were 
given  more  time.  The  colonies  established  by  Rodden  Brothers,  local 
landowners  and  bankers,  are  successful.  The  Avery  and  Leitch  colonies 
have  failed.  Inexperienced  settlers,  poor  soil,  inflated  land  prices,  and 
lack  of  either  financial  help  or  practical  advice  for  beginners  have 
compelled  many  settlers  to  leave. 

Winton.  At  Winton  the  price  of  land  was  $142  an  acre,  and  the 
colonists  agreed  to  pay  this  within  four  years.  In  addition  the  land 
had  to  be  leveled,  ditched,  fenced,  and  planted  before  a  crop  could  be 
grown.  There  are  plenty  of  attractive  homes  at  Winton,  but  the 
owners  have  not  paid  for  them  in  contract  time.  If  the  company  had 
not  been  able  to  give  better  than  contract  terms,  these  settlers  would 
have  had  to  leave. 

Kerman.  The  Kerman  colony  has  two  very  different  classes  of  soil. 
Adjacent  to  the  river  and  running  south  for  two  or  three  miles  the  soil 
is  good;  and  the  settlers  on  the  good  soil  have  prospered.  But  from 
there  to  the  southern  boundary  of  the  company's  land  much  of  the  soil 
is  poor  and  affected  by  hardpan  and  alkali.  The  settlers  who  bought 
this  poor  land  and  agreed  to  pay  for  it  in  five  years  undertook  an 
impossible  task.  A  considerable  part  of  this  colony  was  bought  by  non- 
residents. Among  the  settlers,  who  lacked  experience  and  adequate 
capital,  there  have  been  many  failures.  Some  old  people  lost  in  this 
colony  the  savings  of  years. 


22  LAND    COLONIZATION   AND   RURAL    CREDITS. 

The  Fairmead  Colonies.  Interviews  with  the  officers  of  the  coloniza- 
tion company  and  with  the  settlers,  and  personal  observations  of 
members  of  the  commission  seem  to  justify  the  following  conclusions : 

Settlers  with  ample  capital  or  outside  incomes  have  generally  suc- 
ceeded, but  a  large  percentage  have  abandoned  their  farms  on  account 
of  discouragement,  due  to  lack  of  capital.  Many  settlers  in  arrears  are 
being  carried  by  the  company,  which  is  endeavoring  to  assist  them  in 
securing  loans  from  outside  sources. 

Laguna  de  Tache.  This  colony  started  ten  years  ago,  the  land  selling 
at  $50  an  acre.  Settlers  who  bought  land  at  this  price  have  usually 
succeeded.  Colonization  today  presents  a  harder  problem,  because  the 
price  of  land  has  been  raised  to  $110  an  acre.  Whether  settlers  of  small 
capital  can  pay  this  higher  price  within  the  time  limit  given  has  yet 
to  be  determined. 

A  leasing  system  has  recently  been  inaugurated  by  the  company. 
The  lessee  rents  the  land  at  $3.00  an  acre  the  first  year,  $4.00  the 
second,  and  $5.00  the  third.  At  the  end  of  the  third  year  the  lessee 
must  have  the  land  in  alfalfa,  vines,  or  some  specified  crop.  In  addition 
to  the  rental  money,  if  the  lessee  decides  to  purchase,  he  must  pay  an 
advance  of  5  per  cent  in  the  price  for  each  year  the  option  runs.  Thus 
land  which  sells  at  $110  an  acre  will  cost  $115.50  the  first  year,  $121 
the  second  year,  and  $126.50  the  third  year.  The  system  gives  an 
opportunity  for  young  men  of  small  capital  to  make  a  start,  but  even 
these  payments  seem  larger  than  the  profits  of  agriculture  generally 
warrant. 

Chowchilla.  The  time  given  to  pay  for  the  land  in  the  different 
Chowchilla  subdivisions  varies  from  five  to  ten  years.  Only  a  part  of 
the  payment  period  has  elapsed  since  settlement  began;  but  this  has 
been  enough  to  make  it  clear  that  the  settlers  will  not  earn  any  consid- 
erable part  of  the  payment  money  out  of  the  land  within  the  contract 
period.  The  land  requires  irrigation,  and  the  settler  has  to  provide 
his  own  water  supply  by  pumping  from  wells.  This  requires  a  large 
initial  outlay  and  a  considerable  annual  expense  per  acre  for  irrigation. 

Wasco  and  Shaffer.  In  these  two  colonies  the  price  of  land  varies 
from  $70  to  $90  an  acre,  and  the  contract  time  of  payment  averages 
four  and  one-half  years.  The  actual  time,  under  the  present  manage- 
ment, is  whatever  the  settler  needs.  Some  of  the  Wasco  settlers  bought 
their  farms  for  $32  an  acre.  But  all  settlers  who  are  in  debt  would  feel 
more  secure  and  be  in  better  position  to  plan  for  the  future  if  the  time 
of  payment  were  made  20  years  instead  of  less  than  one-fourth  that  time. 

Fontana.  Fontana  is  an  orchard  colony,  mainly  devoted  to  citrus 
fruits.  Much  of  the  land  is  sold  with  a  water  right  and  already  planted. 
The  average  price  of  planted  land  is  $354  per  acre  and  the  average  time 


LAND   COLONIZATION   AND   RURAL   CREDITS.  23 

of  payment  four  and  one-half  years.  This  payment  period  is  only 
possible  for  settlers  who  have  large  capital,  as  there  can  be  no  income 
from  the  orchards  during  the  first  four  years.  The  company  is  now 
offering  to  lend  money  to  settlers  to  enable  them  to  become  poultry 
raisers  and  so  secure  an  immediate  income.  The  average  capital  of  the 
settlers  interviewed  at  Fontana,  however,  is  great  enough  to  enable 
them  to  pay  for  the  land  in  cash.  Thus  there  is  no  question  of  terms. 

Van  Nuys.  Van  Nuys  can  not  be  considered  as  either  an  agricultural 
or  a  horticultural  colony.  It  is  so  near  Los  Angeles  and  so  well  pro- 
vided with  transportation  facilities  that  the  land  has  a  large  prospective 
residence  value  entirely  independent  of  what  can  be  grown  on  it.  The 
greater  number  of  the  settlers  here  are  persons  of  independent  means. 
Much  of  the  land  has  been  bought  by  people  who  believe  that  the  growth 
of  Los  Angeles  will  enhance  its  residence  value.  Considered  on  a 
productive  basis,  the  average  price  of  $540  an  acre,  to  be  paid  in  less 
than  four  years,  is  prohibitive.  This  has  been  proved  by  the  experience 
of  settlers  who  bought,  expecting  to  complete  the  payments  for  their 
land  by  returns  from  crops.  They  were  unable  to  do  so.  If  members 
of  the  colonization  company  had  not  been  able  to  lend  $60,000  to  buy 
poultry  and  equip  poultry  farms,  many  would  have  failed.  The  com- 
pany is  now  assisting  settlers  in  other  ways.  It  builds  houses  and  sells 
them  to  settlers  on  time  payments ;  it  has  advanced  large  sums  of  money 
to  establish  local  markets ;  it  has  organized  a  cooperative  cannery ;  and 
it  has  otherwise  helped  finance  beginners. 

READJUSTMENT  IN  LAND  SELLING  METHODS  INEVITABLE 
The  inability  of  settlers  to  meet  their  payments  in  these  different 
colonies  does  not  necessarily  mean  that  the  land  is  not  valuable  for 
agriculture  or  horticulture  or  that,  in  most  cases,  it  is  not  worth  the 
price  asked  for  it.  What  it  does  mean  is  that  we  have  been  carrying 
Colonization  on  colonization  enterprises  on  an  impossible  financial 
plans  financially  plan.  If  the  settlers  in  these  colonies  where  the  soil 
impossible  js  go0(j  and  the  water  supply  satisfactory,  had  been 

given  the  time,  the  interest  rate,  and  the  assistance  in  other  directions 
given  settlers  in  Denmark,  Ireland,  Germany,  or  Australia,  the  per- 
centage of  successes  here  would  have  been  as  large  as  in  those  countries. 
Many  with  whom  this  commission  has  talked  do  not  think  that  any 
changes  are  needed  in  colonization  methods.  They  say,  "In  the  past 
men  paid  for  land  in  five  years.  Why  can  they  not  do  it  today?" 
They  seek  to  explain  the  large  percentage  of  failures  by  the  settlers' 
lack  of  industry  and  frugality.  They  tend  naturally  but  unwisely  to 
Greater  cost  continue  along  old  lines,  even  if  they  have  to  be  con- 
of  farm  land  tent  with  settlers  of  low  ideals  and  a  debased  standard 
of  living.  The  fact  is  that  today  men  can  not  pay  for  land  in  five 
years  from  the  profits  from  the  soil. 


24  LAND   COLONIZATION    AND   RURAL   CREDITS. 

That  the  task  of  paying  for  a  farm  out  of  its  products  has  become 
much  harder  in  the  last  ten  years  is  shown  by  the  following  statistics: 

When  colonization  began  at  Orland,  land  was  selling  for  from  $10  to 
$40  an  acre.  The  same  land  with  no  improvements  now  sells  for 
$75  to  $150  an  acre,  with  a  water  right  costing  $40  an  acre  still  to  be 
added. 

The  lands  of  the  Sacramento  Valley  Irrigation  Company  were  bought 
at  an  average  price  of  $37  an  acre.  The  settlers  interviewed  paid  an 
average  price  of  $130  an  acre,  part  of  which  represented  expenditures 
on  the  irrigation  works,  but  settlers  are  still  confronted  with  additional 
expenses  for  completing  the  works  and  meeting  the  interest  on  the 
bonds  of  an  irrigation  district. 

The  Haggin  Grant,  on  which  part  of  the  Carmichael  Colony  is 
located,  sold  before  subdivision  for  less  than  $50  an  acre.  The  same 
land  after  subdivision  sold  for  $200  an  acre. 

The  early  settlers  in  Modesto  and  the  Oakdale  districts  bought  land 
for  less  than  $50  an  acre.  The  same  kind  of  land  in  these  districts  now 
sells  for  $100  and  $150  an  acre — in  some  cases  for  $250  and  $300  an 
acre. 

The  early  settlers  at  Wasco  paid  $32  an  acre,  while  present  settlers 
are  paying  an  average  of  $91. 

The  Mexican  Grant  on  which  the  Van  Nuys  colony  is  located  was 
sold  a  few  years  ago  for  about  $50  an  acre.  The  present  re-sale  prices 
of  the  same  land,  after  sharing  the  costs  of  subdivision,  roads,  and 
other  improvements,  is  $540  an  acre. 

The  first  settlers  at  Patterson  paid  about  half  the  price  paid  by  later 
settlers. 

The  first  settlers  at  Laguna  de  Tache  paid  less  than  half  the  price 
now  asked. 

Throughout  the  area  where  land  is  being  colonized,  land  prices  have 
been  multiplied  by  from  two  to  ten,  while  the  profits  of  farming  have 
increased  but  little  if  at  all.  Hence  some  years  ago  men  who  bought 
land  at  $50  an  acre  could  pay  high  interest  rates  and  get  out  of  debt ; 
while  those  who  have  bought  recently  are  struggling  to  meet  interest 
payments  alone. 

These  higher  prices  for  land  have  made  intensive  cultivation  a  neces- 
sity ;  and  that  in  turn  requires  costlier  improvements  and  higher-priced 
Greater  cost  equipment.  The  investigations  of  the  United  States 
of  farm  census  showed  that  while  the  area  of  the  farm  had 

improvements       diminished  between  1900  and  1910,  the  average  capital 
invested  in  it  had  increased  86  per  cent. 

The  acreage  cost  of  improvement  and  equipment  also  increases  as 
the  size  of  the  farm  diminishes.  The  cost  of  a  house  and  a  stable  on  a 


LAND    COLONIZATION    AND   RURAL   CREDITS.  25 

twenty-acre  farm  may  be  today  no  greater  than  was  formerly  the  cost 
on  a  farm  of  160  acres;  but  the  acreage  cost  is  about  eight  times  as 
great. 

The  estimates  made  by  the  commercial  organizations  show  the  ulti- 
mate cost  of  improvements  on  the  small  intensively  cultivated  farms 
in  some  of  the  older  settled  districts.  The  average  in  Table  II  is 
$180  an  acre.  In  Orland,  where  the  colony  is  six  years  old,  the  average 
cost  of  improvements  already  made  is  about  $100  an  acre.  The  cost  of 
all  improvements  needed  will  be  about  $125  an  acre. 

Eecently  some  of  the  colonization  companies  have  been  studying  the 
feasibility  of  providing  ready-made  farms  for  settlers.  In  doing  this 
Estimates  of  cost  tnev  have  ma<le  estimates  of  what  it  would  cost  to 
of  ready-made  prepare  farms  for  cultivation.  Three  of  these  esti- 
farms  mates  are  given.  The  first  was  prepared  by  Balfour, 

Guthrie  &  Company  of  San  Francisco,  the  second  by  the  San  Joaquin 
Valley  Farm  Lands  Company,  and  the  third  by  Kendrick  &  Company 
of  the  Chowchilla  Ranch. 

Estimated  Cost  of  40-Acre  Dairy  Farm. 
Contra  Costa  County,  California. 

Land:  Forty  acres  with  water  right,  consisting  of  one  share  of  stock 
in  Mutual  Water  Company  to  each  acre  of  land.  Land  leveled  and 
checked,  with  irrigation  ditches  and  boxes,  and  planted  to  alfalfa, 
at  $300  per  acre $12,000  00 

Buildings : 

Dwelling   house— 5   rooms $1,200  00 

Milking  shed  for  40  cows 1,500  00 

Milk  house 650  00 

Well,  windmill  and  tank 200  00 

Sundries  _  100  00 


$3,650  00 
Equipment : 

40  cows  at  $75 $3,000  00 

2  work  horses  at  $100 200  00 

2  driving  horses  at  $150 300  00 

Harness    100  00 

Sundry  implements,  tools,  milk  cans,  etc 500  00 

Allowance  for  incidentals...  250  00 


$4,350  00 

Total  estimated  cost  of  land,  buildings  and  equipment $20,000  00 

Total  cost  per  acre $500  00 

Income. 
Milk — 40  cows — average  2^  gallons  each  per  day  (36,500  gallons  per 

annum)    at  16  cents $5,800  00 

40  calves  at  $5.00 200  00 

Sundries 200  00 

$6,200  00 


26  LAND    COLONIZATION   AND   RURAL    CREDITS. 

Outlay. 

Wages — 2  men  at  $65  per  month  (including  board) $1,560  00 

Feed — winter  feed  for  cows,  barley  for  horses 700  00 

Water — water  charges  $5.00  per  acre   per  annum,   based   on   using 

2  acre  feet  per  acre 200  00 

Taxes   160  00 

Insurance 50  00 

Depreciation:   5  per  cent  on  buildings;  10  per  cent  on  equipment 600  00 


$3,270  00 
Summary. 

Estimated  income $6,200  00 

Estimated  outlay 3,270  00 


Surplus    $2,930  00 

Percentage  of  surplus  to  investment,  14.65. 

The  above  surplus  would  not  provide  for  the  expenses  of  the  settler's 
family,  the  paying  of  interest,  and  the  paying  of  installments  large 
Twenty  years  enough  to  cover  the  principal  in  five  years.  How- 

necessary  for  ever,  there  seems  little  doubt  that  buying  one  of  these 

payment  ready-made  farms  would  be  a  safe  undertaking  on  a 

payment  plan  extending  over  twenty  years,  and  giving  the  privilege  of 
paying  off  at  an  earlier  date,  providing  a  market  for  fresh  milk  could 
be  assured.  If  product  were  to  be  disposed  of  as  butter  fat,  margin  of 
profit  would  be  greatly  reduced. 

Estimated  Cost  of  40-Acre  Dairy  Farm. 

San  Joaquin  Valley,  California. 

40  acres  of  land  at  $200 $8,000  00 

Cost  of  improvements 3,000  00 

20  cows  at  $100 2,000  00 

5  brood  sows  at  $15 75  00 

50  chickens  25  00 

One  team,  wagons,  implements,  etc 500  00 


Total    selling   price . $13,600  00 

Estimated  revenue  as  follows  : 

Returns  from  20  cows  at  $72  per  annum $1,440  00 

Annual  increase  from  cows 200  00 

Annual  return  from  hogs  at  $30 150  00 

Annual  return  from  50  chickens  at  $1 50  00 


Total  receipts $1,840  00 

The  selling  plan  proposed  is  as  follows: 

Total    purchase   price $13,600  00 

First  payment  on  purchase 1,600  00 


Total  indebtedness $12,000  00 

From  the  20  cows  there  should  be  a  monthly  return  of  $6.00  per  head,  or 
$120,  of  which  $96  is  to  be  paid  to  the  company  to  meet  interest  charges,  and 
reduce  principal  indebtedness ;  this  is  at  the  rate  of  $8.00  per  month  per  $1,000 
of  indebtedness ;  and  this  payment,  continued  through  a  period  of  197  months, 
or  16  years,  5  months,  will  wipe  out  the  entire  indebtedness,  if  the  interest  rate 
is  6  per  cent. 


LAND    COLONIZATION    AND   RURAL    CREDITS. 


27 


Subsequent  to  furnishing  this  estimate  the  manager  of  the  enterprise 
has  decided  that  it  would  be  safer  both  for  the  settler  and  for  the 
company  to  provide  for  smaller  payments  during  the  first  three  years 
and  make  the  payment  period  twenty  years  instead  of  sixteen  and  a 
half  years.  On  this  basis,  the  plan  seems  to  be  a  safe  undertaking 
for  settler  and  colonization  company. 

Estimated  Cost  of  40-Acre  Dairy  Farm. 
On  the  Chowchilla  Ranch. 


Cost. 
40  acres  at  $125 $5,000  00 


Improvements  and  equipm't 
2  horses  _.  


2,175  00 
200  00 


30  cows 2,100  00 


3  brood   sows- 
50  chickens  _. 


45  00 
25  00 


$9,545  00 
Less  paid  on  account 2,000  00 


200  00 


Cash  required  to  start. 
10  per  cent  down  payment-       $500  00 

Payment  on  account 1,230  00 

Cash  payment 

Company  furnishes  cows 
without  cash. 

Cash  payment 

Cash  payment 


45  00 
25  00 


$2,000  00 


Balance   $7,545  00 

Balance  due  $7,545  00 

Interest  at  6  per  cent  per  annum 452  70 

Taxes   _  40  00 


Amount  due  at  end  of  first  year $492  70 


Minimum  income  first  year. 

30  cows  at  $36 $1,080  00 

180  00 


Less  interest  and  taxes— 


$1,260  00 
492  70 


Surplus   $767  30 


Minimum  income  second  year. 

30  cows  at  $72 $2,160  00 

60  hogs  at  $10 


600  00 


Less  interest  and  taxes. _ 


$2,760  00 
492  70 


Payment    on    land,    10    per 
cent  on  balance__ 


$2,267  30 


450  00 


Surplus    $1,817  30 

NOTE. — No  account  is  taken  from  income  on  chickens,  as  these  are  expected 
to  help  carry  running  expenses.  It  is,  of  course,  presumed  that  during  the  first 
and  second  years,  surplus  will  be  used  to  wipe  out  floating  indebtedness,  and  for 
the  next  three  years  to  provide  more  comforts  and  better  improvements. 

The  above  estimate  does  not  include  any  provision  for  wages,  nor  for 
payments  on  cows,  nor  repaying  local  dealers  or  others  who  advanced 
No  provision  money  for  improvements  and  equipment.  To  care  for 
for  wages,  etc.  30  cows  and  cultivate  40  acres  of  land  intensively,  as 
must  be  done  to  grow  feed  enough  for  over  50  head  of  livestock,  would 
require  the  labor  of  two  or  three  men ;  so  that'wages  and  living  expenses 
alone  could  easily  absorb  the  first  year 's  surplus. 


28  LAND    COLONIZATION   AND   RURAL    CREDITS. 

Unless  a  considerable  part  of  the  land  were  leveled  and  prepared  for 
irrigation,  30  cows  could  not  be  supported  the  first  year. 

These  estimates  are  published  mainly  to  show  one  significant  fact, 
that  to  buy  and  equip  a  farm  so  as  to  pay  for  it  in  ten  years  requires 
an  almost  immediate  investment  of  over  $100  an  acre  in  addition  to  the 
cost  of  the  land. 

Professor  R.  L.  Adams  prepared  for  the  commission  a  valuable 
report  on  the  equipment  required  on  an  intensively  cultivated  farm. 
In  this  he  gives  the  total  cost  of  equipping  a  30-cow  dairy  farm  at 
$6,500.  Assuming  this  farm  to  have  an  area  of  40  acres,  the  cost  would 
be  $160  an  acre.  He  estimates  the  cost  of  equipping  a  40-acre  general 
farm  at  about  $4,500,  or  a  little  over  $100  an  acre. 

The  Fresno  Suburban  Homes  Company,  which  has  recently  made  a 
thorough  study  of  the  cost  of  developing  a  fig  orchard,  has  fixed  the 
cost  of  preparing  and  cultivating  the  land  for  the  first  five  years  at 
$127  an  acre.  If  to  this  is  added  the  cost  of  a  house  and  other  acces- 
sory buildings,  the  cost  on  a  20-acre  orchard  at  the  end  of  five  years 
would  be  over  $200  an  acre. 

The  estimate  of  Professor  Adams  does  not  include  water  rights  or  a 
number  of  other  expenditures  which  can  not  be  avoided  on  an  irrigated 
Cost  of  equipment  farm.  The  first  two  estimates  include  in  the  price 
$100  to  $200  an  of  the  land  some  of  the  expenditures  on  its  improve- 

acre  in  addition  ment.  All  the  estimates  agree,  therefore,  that  the 
to  cost  of  land  cost  Of  preparing  a  40-acre  irrigated  farm  in  Cali- 

fornia so  that  it  will  be  habitable  and  in  condition  to  be  fully  productive 
will  be  from  $100  to  $200  an  acre. 

On  pages  30  and  31  is  given  the  cost  of  bringing  an  orange  orchard 
into  full  production.  The  total  is  between  $400  and  $600  an  acre. 

Some  credit  system  more  liberal  than  that  of  the  Federal  Farm  Loan 
Act  or  that  provided  by  colonization  enterprises  is  therefore  indispens- 
able if  we  are  to  attract  and  retain  many  homeseekers  who  have  all  the 
elements  of  experience  and  character  essential  to  success  but  who,  lack- 
ing capital,  must  depend  on  their  frugality  and  industry  to  earn  the 
money  to  pay  for  their  homes. 

THE  RETURNS  FROM  THE  INTENSIVELY  CULTIVATED  FARM 
The  short  time  given  to  pay  for  land  in  most  colonization  contracts 
implies  a  profit  from  cultivation  of  between  20  per  cent  and  25  per  cent 
Implied  profit:  °f  tne  cost  °^  land  and  equipment.     Such  profits 

20  to  25  per  cent;  are  occasionally  made,  but  they  are  not  the  rule, 
actual  profit:  Investigations  of  the  United  States  Department  of 

5  per  .cent  Agriculture  show  that  the  fully  improved  farm 

rarely  pays  more  than  5  per  cent  on  the  investment,  if  a  reasonable 
allowance  is  made  for  the  wages  of  the  farmer  and  his  family. 


LAND    COLONIZATION   AND   RURAL    CREDITS. 


29 


The  United  States  Reclamation  Service  has  kept  a  careful  census 
of  the  yield  and  the  value  of  crops  on  the  federal  projects  since  their 
Value  of  crops  inception.  In  the  thirteenth  annual  report  the 

on  federal  projects      average  values  of  crops  are  as  follows : 

1910 $31  00  per  acre 

1911 27  00  per  acre 

1912 26  60  per  acre 

1913 24  50  per  acre 

The  following  table  gives  a  more  detailed  report  for  1914.  The 
reductions  in  acreage  value  of  crops  were  mainly  due  to  the  declining 
prices  of  products.  For  the  last  two  years  prices  have  been  higher. 


TABLE  VI. 

Crop    Report    for    Various    Projects,    Compiled    From    the    Fourteenth    Annual 
Report    of    Reclamation    Service. 


Page  In 
report. 

Project 

Cropped 
acreage 

Value 

Total           Per  acre 

15 
53 
60 
70 
85 
93 
102 
118 
123 
129 
134 
148 
107 
165 
175 
188 
204 
212 
218 
218 
227 
240 
250 
258 
285 
299 
3C1 
318 

All    government    reclamation   projects 

703,424 
169,719 

22,568 
6,540 
33,091 
58,064 
39,138 
474 
6,204 
1,004 
17,068 
2,163 
6,560.5 
5,621 
59,536 
39,285 
10,731 
1,172 
18,555 
8,747 
1,045 
3,013.4 
24,440 
36,709 
3,180 
49,273 
15,920 
20,905 

116,475,517 
4,039,079 
709,409 
176,331 
870,381 
1,033,447 
661,796 
3,890 
81,025 
10,653 
454,583 
34,618 
106,594 
96,707 
890,202 
441,018 
237,663 
21,458 
726,222 
434,498 
36,440 
88,613 
347,344 
461,188 
104,575 
2,858,845 
472,480 
313,826 

$23  50 
23  80 
31  43 
26  99 
26  30 
17  80 
16  91 
820 
1306 
1061 
26  63 
16  00 
1625 
17  20 
14  95 
11  23 
22  15 
18  31 
39  14 
49  67 
34  87 
29  41 
14  22 
12  56 
32  88 
58  02 
29  60 
15  00 

Salt   River  project,  Arizona 

Yuma    project,    Arizona-California  

Orland    project,    California  

Uncompahgre   Valley,    Colorado 

Boise    project,    Idaho 

Minidoka    project,    Idaho 

Black  Foot  project,  Montana              .      ...         ....- 

Flathead   project,    Montana  

Fort  Peek  project,  Montana 

Huntley   project,    Montana    .  . 

Milk   River  project,   Montana  

Sun  River  project,   Montana  ... 

Tower   Yellowstone  project,   Montana  

North   Platte  project,    Nebraska-Wyoming 

Truckee-Carson  project,   Nevada  

Carlsbad  project,   New  Mexico  

Honda  project,  New  Mexico  

Rio  Grande  project,  Mesilla  Valley 

Rio  Grande  project,  El  Paso  Valley 

Williston  project,   North   Dakota  

Umatilla    project,    Oregon  

Klamath    project,    Oregon-California  

Belle  Fourche  project,   South   Dakota  

Okanogan    project,    Washington  

Yakima    project,    Washington  

Yakima   project,    Washington.      

Shoshone   project,   Wyoming  

Totals    

1,364,149.9 

$32,183,398 

$656  69 
$23  45 

Ayerage    .. 

30  LAND   COLONIZATION   AND   RURAL    CREDITS. 

In  all  districts  exceptional  single  farms  and  single  acres  brought  far 
more  than  average  returns.  For  example,  single  acres  of  citrus  fruits 
Payment  plans  at  Orland  have  brought  a  return  of  $249  each;  and 
must  be  based  single  acres  of  small  fruits  have  brought  a  return  of 
on  averages  $252  each.  Single  acres  devoted  to  truck  farming 

in  California  colonies  have  brought  returns  of  over  $100  each.  The 
payment  plans  for  colony  farms  should  not,  of  course,  be  based  on  the 
returns  of  the  exceptional  acre  or  the  exceptional  farm,  but  on  averages. 

The  gross  value  of  crops  grown  on  irrigated  land  in  California  given 
in  the  United  States  census  as  $43.50  an  acre  is  higher  than  can  be 
Census  estimates  expected  by  beginners,  because  it  includes  the  highly 
too  high  improved  orchards  and  vineyards  in  full  bearing. 

But  even  at  this  rate,  a  20-acre  farm  would  give  little  more  than  a 
living  income  for  the  settler's  family  if  there  were  no  expenses  for 
taxes,  water,  and  repairs.  Furthermore,  the  census  figures  quoted 
include  the  acreage  devoted  to  tropical  and  semitropical  fruits,  with 
an  average  gross  value  of  $154.32  an  acre,  and  to  orchards  of  other 
fruits  with  an  average  value  of  $77.18  an  acre.  Alfalfa,  which  is  the 
beginner's  main  dependence,  had  an  average  acreage  value  of  only 
$22.94. 

CITRUS  FRUITS:  COST  OF  PRODUCTION  AND  INCOME 
Even  in  industries  like  the  growing  of  citrus  fruits,  which  require 
a  large  investment  in  land,  a  long  wait  for  returns,  and  an  exceptional 
skill  and  care  in  cultivation  and  marketing,  the  net  profits  over  and 
above  expenses  of  cultivation  only  average  4.3  per  cent  on  land  valued 
at  $1,000  an  acre,  according  to  a  report  prepared  by  the  California 
Citrus  Growers'  Association. 

Professor  R.  S.  Vaile  of  the  Citrus  Experiment  Station  at  Riverside, 
has  prepared  the  following  tables  on  the  cost  and  production  of  citrus 
fruits : 

TABLE  VII. 

Cost  of   Developing   Orange   Orchards. 

Land  with  water,  ready  to  plant $400  00 

Trees  planted  75  00 

Pipe  lines 15  00 

$490  00 
Cost  for  first  four  years,  per  year. 

Labor  and  team  work $20  00  $80  00 

Fertilizer,  including  covercrop 6  00  24  00 

Taxes    5  00  20  00 

Water  charges 14  00  56  00 

Miscellaneous — tree  care,  depreciation,  etc.         7  00  28  00 

Administration,  superintendence,  etc 8  00  32  00 


Total  per  acre $60  00          $240  00  240  00 


LAND   COLONIZATION   AND   RURAL    CREDITS. 


31 


Cost  for  fifth  to  seventh  years,  inclusive. 


Labor  and  team  work $25  00 

Fertilizer,   including  covercrop 20  00 

Taxes   7  00 

Water  charges   20  00 

Pest  control 6  00 

Miscellaneous — tree  care,  depreciation,  etc.  8  00 

Administration,   superintendence,   etc 9  00 


Total  per  acre $95  00 


$75  00 
60  00 
21  00 
60  00 
18  00 
24  00 
27  00 

$285  00 


Cost,  eighth  to  tenth  years,  inclusive. 

Labor  and  team   work $30  00  $90  00 

Fertilizer,  including   covercrop 40  00  120  00 

Taxes   11  00  33  00 

Water  charges 20  00  60  00 

Pest  control 10  00  30  00 

Miscellaneous — tree  care,  depreciation,  etc.  12  00  36  00 

Administration,   superintendence,   etc 12  00  36  00 


Total  per  acre $135  00          $405  00 

Total  cost  for  10  years,  per  acre 


285  00 


405  00 


$1,420  00 


TABLE  VIII. 

Yields  and  Values  of  Oranges. 

5th  year 30  packed  boxes  at  $1.30  on  trees $39  00 

6th  year 60  packed  boxes  at  $1.30  on  trees 78  00 

7th  year 90  packed  boxes  at  $1.30  on  trees 117  00 

8th  year 120  packed  boxes  at  $1.30  on  trees 156  00 

9th  year 130  packed  boxes  at  $1.30  on  trees 169  00 

10th  year 140  packed  boxes  at  $1.30  on  trees 182  00 


TABLE  IK. 
Financial   Summary   of   Oranges   to   10   Years   of  Age. 


Cost 

Credit 

Net 
cost 

Net 
credit 

Accumu- 
lated 
cost 
without 
interest 

Interest 
at  5  per 
cent 

Total 
accumu- 
lated 
cost 

Original  cost 

$490  00 

$490  00 

Cost  first  4  years    at  $60  00 

240  00 

240  00 

$730  00 

$122  00 

$852  00 

Fifth  year  

95  00 

$39  00 

$56  00 

786  00 

42  60 

950  60 

Sixth    year 

95  00 

78  00 

17  00 

803  00 

47  53 

1,015  13 

Seventh   year 

95  00 

117  00 

$22  00 

781  00 

50  75 

1,043  88 

Highth   year  _ 

135  00 

156  00 

21  00 

760  00 

52  19 

1,075  07 

Ninth    year   .    _          .       .  _ 

135  00 

169  00 

34  00 

726  00 

53  72 

1,094  79 

Tenth  year 

135  00 

195  00 

60  00 

666  00 

54  74 

1,089  52 

32  LAND    COLONIZATION   AND   RURAL   CREDITS. 

TABLE  X. 
Cost  of   Developing   Lemon   Orchards. 

Land  with  water,  ready  to  plant $400  00 

Trees  planted 75  00 

Pipe  lines 15  00 

$490  00 

Cost  for  first  four  years. 

Labor  and  team  work $20  00  $80  00 

Fertilizer,  including  covercrop 3  00  24  00 

Taxes   5  00  20  00 

Water  charges 14  00  56  00 

Miscellaneous — tree  care,  etc.     9  00  36  00 

Administration,  superintendence,   etc 8  00  32  00 


Total  per  acre $62  00  $248  00                248  00 

Cost,  fifth  to  seventh  years,  inclusive. 

Labor  and  team  work $25  00  $75  00 

Fertilizer 30  00  90  00 

Taxes   7  00  21  00 

Water    24  00  72  00 

Miscellaneous — tree  care,  etc. 16  00  48  00 

Administration   9  00  27  00 

Pest  control ;  frost  protection 25  00  75  00 


Total  per  acre $136  00  $408  00                408  00 

Cost,  eighth  to  tenth  years,  inclusive. 

Labor  and  team  work $32  00  $96  00 

Fertilizer 60  00  180  00 

Taxes   11  00  33  00 

Water    24  00  72  00 

Miscellaneous — tree  care,  pruning,  etc 23  00  69  00 

Administration   15  00  45  00 

Pest  control;  frost  protection 30  00  90  00 


Total  per  acre $195  00          $585  00  585  00 


Total  cost  for  10  years,  per  acre $1,731  00 


TABLE  XI. 

Yields  and  Values  of  Lemons. 

5th  year 25  packed  boxes  at  $1.70  net  on  trees $42  50 

6th  year 50  packed  boxes  at  $1.70  net  on  trees 85  00 

7th  year 80  packed  boxes  at  $1.70  net  on  trees 136  00 

8th  year 120  packed  boxes  at  $1.70  net  on  trees 204  00 

9th  year 140  packed  boxes  at  $1.70  net  on  trees 238  00 

10th  year 150  packed  boxes  at  $1.70  net  on  trees 255  00 


LAND    COLONIZATION   AND   RURAL   CREDITS. 


33 


TABLE  XII. 
Financial  Summary  of  Lemons  to  10  Years  of  Age. 


Cost 

Credit 

Net 
cost 

Net 
credit 

Accumu- 
lated 
coat 
without 
interest 

Interest 
at  5  per 
cent 

Total 
accumu- 
lated 
cost 

Original  cost 

$490  00 

$490  00 

$490  00 

First   year 

62  00 

62  00 

552  00 

$24  50 

$576  50 

Second  year  _ 

62  00 

62  00 

614  00 

28  82 

667  32 

Third   year 

62  00 

62  00 

676  00 

33  36 

762  68 

Fourth    year 

62  00 

62  00 

738  00 

38  13 

862  18 

Fifth    year   ...     . 

136  00 

$42  50 

93  50 

831  50 

43  14 

956  31 

Sixth  year  

136  00 

85  00 

51  00 

882  50 

47  81 

1,055  12 

Seventh  year      

136  00 

136  00 

882  50 

52  75 

1  107  87 

Eighth  year  

195  00 

204  00 

$8  00 

873  50 

55  39 

1,154  26 

Ninth   year  . 

195  00 

238  00 

43  00 

830  50 

57  71 

1  168  97 

Tenth   year  .  

195  00 

255  00 

60  00 

770  50 

58  44 

1  167  41 

3—27025 


34  LAND    COLONIZATION   AND   RURAL   CREDITS. 

The  letter  transmitting  the  statistics  given  in  Tables  VII  to  XII 
contains  the  following  paragraph  relative  to  the  size  of  the  orchard 
required  to  give  a  living  income  and  the  capital  required  by  the 
settler : 

"There  is  one  other  factor  which  I  would  call  attention  to  in 
connection  with  citrus  statistics,  and  that  has  to  do  with  the  size 
of  unit  to  be  desired.  The  total  labor  cost,  including  management, 
on  bearing  citrus  groves  will  vary  between  $20  and  $50  per  acre, 
the  average  being  in  the  neighborhood  of  $30  for  oranges  and 
$45  for  lemons.  These  figures  include  the  labor  of  fumigation  and 
other  pest  control  which  practically  no  growers  can  handle  for 
themselves,  and  also  the  pruning  expense  which  comparatively  few 
growers  handle  for  themselves.  Figuring  on  that  basis,  a  farm 
unit  should  have  no  less  than  thirty  acres  of  land  in  order  to  be 
justified  in  expecting  a  labor  income  of  from  $800  to  $1,000  for 
the  entire  family.  Incidentally  our  study  of  orchards  of  various 
sizes  indicates  that  one  animal  on  the  average  will  care  for  from 
13  to  18  acres,  or  one  team  will  take  care  of  about  30  acres. ' ' 

TESTIMONY  REGARDING  COLONIZATION  METHODS  AND  RESULTS 
Some  of  the  best  informed  men  of  the  state  appeared  before  the 
commission  at  its  public  hearings  and  gave  their  views  of  existing 
conditions.  Their  conclusions  were  free  from  any  bias  and  were  based 
in  each  case  on  an  extended  experience.  We  can  give  extracts  from 
the  testimony  of  only  a  few  of  these  witnesses  but  the  few  represent 
fairly  the  views  of  nearly  all  of  them. 

MR.  C.  F.  DILLMAN,  president  of  the  D.  0.  Mills  Bank,  Sacramento, 
testified  as  follows  regarding  colonization: 

Q.     Have  there  been  any  number  of  failures,  so  far  as  you  know  ? 

A.    Yes,  there  is  no  question  of  that. 

Q.  Have  you  been  able  to  determine  the  cause  of  these  failures  and 
a  remedy,  if  there  is  any  remedy? 

A.  One  of  the  principal  causes,  I  think,  is  the  high  price  of  the 
land.  People  charge  too  much  for  the  land.  Then  again,  colonists 
are  put  on  land  that  is  not  suitable  for  what  they  came  to  raise.  And 
some  Eastern  people  have  made  failures  because  the  land  was  different 
from  what  they  were  used  to  in  the  East. 

Q.     They  have  gone  into  this  without  counting  the  cost  and  lost? 

A.    People  have  lost  a  great  deal  of  money. 

Q.  Have  they  failed  despite  being  properly  financed,  or  has  lack  of 
proper  financing  been  the  cause  of  their  failure? 

A.  I  think  you  might  say  both.  I  have  known  people  with  enough 
money  to  keep  themselves  going,  that  after  a  while  have  abandoned 
their  farms  and  left,  and  are  working  in  the  cities  at  some  kind  of 
labor.  And  then  again,  I  have  known  people  without  proper  financing 
to  fail  too. 


LAND    COLONIZATION   AND   RURAL    CREDITS.  35 

Q.    From  what  causes  did  lots  of  them  fail? 

A.  They  had  a  dry  year,  or  a  flood,  or  grasshoppers,  or  the  price 
of  fruit  was  poor.  There  were  a  number  of  things.  It  depended  on 
the  year,  conditions,  etc. 

Q.  In  how  far  is  the  city  bank  affected  by  the  prosperity  or  adver- 
sity of  the  small  farmer? 

A.  If  he  is  close  to  the  city  bank,  the  bank  is  very  vitally  interested 
in  his  success,  though  he  is  not,  as  a  rule,  much  of  a  depositor. 

Q.     His  adversity  is  felt  by  the  city  bank  ? 

A.  Yes,  it  is  very  noticeable,  as  the  merchant  is  probably  carrying 
the  farmer;  and  if  he  can  not  pay  the  merchant,  the  merchant  has  to 
go  to  the  bank. 

Q.  Then  the  prosperity  of  the  small  farmer  is  very  material,  as  he 
is  really  the  foundation? 

A.     Surely. 

Q.  And  if  the  foundation  is  strong  the  whole  community  will  be 
better  and  stronger? 

A.  The  community  lives  off  the  farmer,  either  from  what  he  pro- 
duces or  what  he  brings  into  the  country. 

Q.  Anything  that  tends  to  aid  in  the  prosperity  of  the  small  farmer 
reflects  itself  to  all  about  him? 

A.  Very  much.  I  think  particularly  the  small  farmer;  the  large 
farmer  does  not  seem  to  have  been  so  much  of  a  benefit.  The  large 
farmer  manages  to  get  along  without  much  trouble,  while  the  small 
farmer,  the  man  who  really  develops  the  country  and  perhaps  pays  an 
improper  share  of  the  taxes,  receives  little  benefit  or  assistance  from 
the  banks. 

Q.  Looking  at  it  from  the  eye  of  the  banker,  what  is  likely  to  pro- 
duce the  better  results,  a  community  tilled  by  farm  tenants,  or  a 
community  tilled  by  small  landed  proprietors  with  an  interest  in  the 
soil  they  till  ? 

A.  The  small  landed  proprietors,  by  a  very  large  measure.  I 
think  you  will  remember  the  time  when  a  lot  of  our  American  people 
were  at  Newcastle  and  Florin  and  the  farmers  and  the  boys  did  most 
of  the  work,  with  a  few  Chinamen.  Now  the  Americans  are  sitting 
on  the  fence  and  seeing  Orientals  handle  their  property  for  them. 
I  remember  that  a  man  with  a  small  farm  ten  years  ago  told  me  that 
about  10  per  cent  of  his  gross  receipts  went  for  help,  and  now  he  tells 
me  that  60  per  cent  goes  for  help. 

Q.  Then  anything  and  everything  that  can  be  done  to  discourage 
farm  tenantry,  and  on  the  other  hand  encourage  the  small  landed 
proprietor,  ought  to  be  done? 

A.     Certainly. 


36  LAND   COLONIZATION   AND   RURAL    CREDITS. 

Q.  You  have  given  more  or  less  study  to  this  system  of  rural  credits. 
What  are  your  ideas  regarding  it? 

A.  Well,  I  have  studied  the  development  and  the  troubles  in  Eng- 
land and  Ireland,  and  also  have  looked  into  the  German  system  and 
the  Australian  success,  and  it  seems  to  me  it  would  be  a  great  benefit 
to  the  country  if  the  small  farmer,  with  proper  safeguards  and  proper 
restrictions,  could  be  helped  to  get  himself  going.  After  he  has  posses- 
sion of  his  land  I  think  the  small  farmer  will  be  able  to  make  good. 
What  he  needs  is  that  $600  Mr.  Walton  was  telling  about. 

Q.    You  heard  more  or  less  of  the  testimony  yesterday? 

A.    Yes,  sir. 

Q.  You  remember  the  question  was  raised  as  to  whether  it  was  wise 
for  the  state  to  father  a  system  of  rural  credits ;  also  the  question  was 
brought  out  whether,  if  the  state  did  father  a  system  of  rural  credits 
by  standing  behind  the  bonds,  it  would  be  helpful  to  the  banker? 

A.  I  think  it  would  help  the  banker  from  the  general  prosperity, 
and  it  does  not  compete  with  the  banker  in  any  way.  So  I  should 
think  it  would  all  be  in  line  of  a  general  help  to  the  bankers,  because 
what  we  need  is  population.  Why,  we  have  thousands  of  acres  in  great 
tracts  in  northern  California  that  ought  to  be  cut  up  in  tracts  of 
40  or  80  acres.  It  would  be  the  greatest  blessing  we  could  have  to  get 
this  done. 

Q.  I  take  it  your  attitude  is  that  a  movement  of  this  kind  on  behalf 
of  the  state  would  create  depositors  for  the  banks  ? 

A.    Surely. 

Q.  Assuming  that  the  system  could  be  surrounded  by  proper  safe- 
guards and  other  protection  given  the  state,  can  you  see  any  objection 
to  the  state  lending  its  credit  to  a  movement  of  this  kind  ? 

A.  I  know  that  this  thing  of  the  state  lending  its  credit  is  a  thing 
about  which  there  is  a  great  deal  of  difference  of  opinion.  You  no 
doubt  know  that  the  state  loaned  its  credit  in  the  early  days  of  develop- 
ment and  I  am  satisfied  that  the  general  opinion  was  that  it  was  abused ; 
and  the  constitution  was  amended  to  prevent  anything  like  that  in  the 
future.  But  times  have  changed  now,  and  if  things  can  be  safeguarded, 
it  would  be  a  good  thing  to  have  the  state  lend  its  credit  to  the  small 
landowner  who  has  proven  his  ability  to  use  it  right.  I  think  it  would 
be  a  great  benefit  to  the  state. 

Q.  Do  you  regard  the  fact  that  we  have  the  referendum  at  our 
command,  a  safeguard  which  did  not  exist  in  earlier  history?  Would 
that  not  be  an  added  safeguard?  Suppose  we  should  have  a  corrupt 
or  unwise  legislature  that  would  unwisely  or  corruptly  loan  the  credit 
of  the  state.  Is  it  not  a  fact  that  we  could  stop  it  with  the  referendum  ? 

A.  Yes,  but  I  do  not  think  we  would  ever  be  called  upon  to  do  that, 
as  the  farmers  are  spread  all  over  the  country  and  could  not  get 


LAND   COLONIZATION   AND   KURAL   CREDITS.  37 

together  and  work  any  injury  to  the  state  as  a  large  corporation  could. 
I  can  not  imagine  where  the  legislature  could  use  this  power  to  the 
injury  or  detriment  of  the  state. 

Q.  In  other  words,  if  the  proposition  were  to  loan  the  credit  of  the 
state  to  what  is  termed  ' '  big  business ' '  you  would  be  opposed  to  it  ? 

A.  Yes,  in  that  case  I  believe  that  corruption  would  be  possible, 
but  I  can  not  see  why  it  is  not  all  right  to  loan  it  to  the  small  farmer 
or  to  the  young  man  to  give  him  a  start  as  a  farmer. 

Q.  I  take  it  you  are  in  favor  of  the  proposed  constitutional 
amendment  ? 

A.     I  am  in  favor  of  the  amendment. 

Q.  Suppose  there  were  a  tract  of  10,000  acres  purchased  here,  what 
would  the  purchaser  pay  for  that  to  sell  in  small  tracts? 

A.  I  would  say  that  a  person  buying  10,000  acres  of  land  at  from 
$50  to  $60  an  acre  would  pay  a  small  portion  down  and  undoubtedly 
cut  it  up  into  small  tracts  and  put  it  on  the  market  at  $200  or  more 
per  acre,  right  off. 

Q.     Then  the  increase  might  be  400  per  cent  instead  of  15  per  cent? 

A.    Yes. 

Q.  Is  it  a  difficult  matter  to  sell  the  land  at  that  price?  "What 
commission  is  paid? 

A.  I  have  had  some  land  to  sell,  and  we  have  taken  the  matter  up 
with  competent  real  estate  men.  They  wanted  25  per  cent  for  adver- 
tising here  and  in  the  East. 

Q.  In  that  case  it  is  possible  that  the  settler  with  very  small  capital 
will  pay  more  to  the  land  salesman  than  the  land  cost  originally  in  the 
beginning  of  this  development? 

A.  Twenty-five  per  cent  would  be  more  than  was  originally  paid 
for  the  land  in  many  cases. 

Testimony  of  A.  HOCHHEIMER,  merchant,  Willows,  California. 

A  good  many  colonists  exhausted  their  resources  with  the  initial 
payment.  A  man,  who  through  paying  50  per  cent  of  the  cost  of  his 
land  thus  exhausts  his  resources,  has  little  chance  of  winning  out.  He 
may  by  industry,  self-sacrifice,  strict  economy,  and  self-denial,  possibly 
succeed,  and  in  a  few  years  be  able  to  extricate  himself.  He  may 
possibly  get  out  a  portion  of  his  equity  or  even  a  little  more.  The 
average  American  is  not  well  adapted  to  the  present  system.  The 
people  who  are  making  a  success  are  foreigners — Italians,  Portuguese 
and  Swiss.  They  will  possibly  succeed  where  Americans  will  not.  It 
is  impossible  for  the  colonist  in  his  early  struggle  to  be  generous,  to 
better  social  conditions,  and  to  take  an  interest  in  politics,  good  roads 
or  public  affairs.  His  struggle  for  existence  takes  up  his  undivided 
attention. 


38  LAND   COLONIZATION   AND   RURAL   CREDITS. 

Raw  land,  previous  to  opening  colonization,  was  worth  from  $20  to 
$50  an  acre.  Average  $35  to  $40.  Was  sold  to  colonists  at  $125  to 
$275,  average  $175.  Initial  payment  $15,  with  6  per  cent  on  deferred 
payments.  Period  10  years.  Absolute  failure  is  certain.  It  is  impossi- 
ble to  pay  interest  on  deferred  payments  and  support  a  family  off  the 
land.  The  chief  trouble  of  farmers  is  that  they  can  not  get  a  loan  at 
fair  rate  and  can  not  market  their  products. 

Testimony  of  JUDGE  N.  P.  CHIPMAN,  Sacramento  California. 

One  trouble  has  been  in  these  colonization  schemes  the  sale  of  sub- 
divisions to  clerks  and  nonresidents — clerks  scattered  around  over  the 
state,  who  have  been  induced  to  buy  on  the  representation  that  they 
could  farm  by  hiring  the  work  done,  and  in  four  or  five  years  they 
would  have  an  income,  and  in  a  short  time  might  retire — all  that  sort  of 
representation,  which  has  no  foundation  in  truth.  I  am  told  that  the 
old  system  meant  not  only  failure  to  those  who  were  selling  the  land, 
but  failure  to  the  purchaser,  because  the  land  came  back  on  the  agents' 
hands,  retarded  sales  and  discouraged  those  who  had  made  purchases. 
One  who  has  sold  land  to  colonists  told  me  he  hoped  that  the  ten  year 
installments  plan  might  work  out  successfully. 

Q.  Must  not  that  mean,  General,  the  following :  Isn  't  it  the  fact  that 
the  state  pays  for  this  unsuccessful  man?  The  settler  with  his  small 
capital  is  exploited  by  the  system.  He  finds  himself  in  due  course 
penniless.  He  is  thrown  back  into  the  city,  perhaps,  an  unskilled, 
unemployed  laborer  who  may  become  an  occasional  worker.  And,  on 
top  of  it  all,  in  the  minds  of  this  man  and  his  friends,  farming  is  likely 
to  receive  a  black  eye. 

A.  The  state  is  suffering  from  that  condition  of  things  today.  It 
can  not  be  otherwise.  A  stranger  coming  into  this  country,  visiting 
one  of  these  tracts  that  have  been  colonized,  tracing  the  purchasers  and 
seeing  the  number  of  subdivisions  which  nothing  is  being  done  with, 
finding  that  they  are  owned  by  persons  living  in  the  city  and  that 
others  have  gone  back  to  the  owners,  and  observing  the  state  of  develop- 
ment, a  stranger  can  not  help  but  come  to  the  conclusion  that  he  does 
not  want  to  settle  in  this  tract.  And  the  state  is  suffering  from  it. 
There  is  a  certain  amount  of  discredit  thrown  upon  honest  representa- 
tion nowadays  by  reason  of  this  condition  that  is  found  in  various  parts 
of  the  state. 

Testimony  of  L.  A.  NARES,  manager  colonization  enterprises,  Fresno, 

California. 

It  would  certainly  be  a  benefit  to  the  whole  state  of  California  if 
land  could  be  colonized  on  6  per  cent  basis  instead  of  10  or  12  per  cent 
basis  as  it  is  now  for  interest  charges  practically.  And  the  price  of 
land  averages  in  the  whole  state  100  per  cent  over  what  it  should  be. 


LAND   COLONIZATION   AND   RURAL   CREDITS.  39 

The  fact  is  that  it  is  more  than  100  per  cent  in  a  great  many  cases.  I 
am  familiar  with  all  the  land  propositions  in  California.  I  have  had 
expert  examinations 'made  since  the  big  failure  up  near  San  Francisco. 
In  most  of  those  cases  the  price  is  two  or  three  hundred  per  cent  higher 
than  it  should  be.  *  * 

I  think  that,  barring  our  getting  rural  credits,  there  should  be  some 
state  supervision  of  all  colonization  enterprises. 

Q.     Sort  of  state  colonization  blue-sky  law? 

A.  Yes ;  it  should  not  be  left  even  to  as  strong  a  board  as  the  Cali- 
fornia Development  Board.  It  should  have  for  its  object  restriction 
of  exploitation  of  land  and  better  colonization  methods.  It  is  very 
difficult  for  even  very  large  and  influential  corporations  or  boards  of 
associations  to  any  way  regulate  some  of  the  exploitations  that  are 
taking  place. 

Q.  I  presume  the  explanation  lies  in  the  fact  that  these  privately- 
organized  boards  have  only  moral  influence  and  no  legal  power.  You 
would  locate  legal  power  somewhere? 

A.  Yes.  There  has  been  an  act  before  the  legislature  which,  for 
some  reason  or  other,  was  not  approved  by  the  Governor  and  not 
signed.  The  bill  was  introduced  at  the  instance  of  the  State  Realty 
Federation ;  that  is,  the  real  estate  men  themselves  wanted  some  power 
created  in  the  state  to  regulate  colonization  enterprises.  I  blame  the 
exploiters  of  land  for  a  great  deal  of  the  present  condition  of  our  real 
estate  marketing.  Much  exploitation  has  been  done.  In  many  cases 
the  owners  or  exploiters  of  these  lands  were  themselves  taken  in  for 
not  understanding  conditions  themselves,  but  they  passed  it  on  to 
others.  A  great  deal  of  money  was  lost  to  California  by  exploited 
land  enterprises;  it  hurt  the  fair  name  of  the  state  very  much  in  the 
East. 

Testimony  of  ROBERT  NEWTON  LYNCH,  secretary  Chamber  of  Com- 
merce, San  Francisco,  California. 

Q.  It  has  been  pointed  out  by  various  witnesses  that  the  underlying 
causes  for  much  of  the  failure  of  our  colonization  schemes  are  as 
follows :  First,  the  selection  of  unfit  land ;  second,  the  selection  of  unfit 
settlers ;  third,  ignorance  on  the  part  of  the  promoters  of  land  coloniza- 
tion as  to  proper  colonization  methods,  and  ignorance  on  the  part  of 
many  of  the  settlers  or  homeseekers  in  knowing  how  to  plant,  what  to 
pJLant,  and  when  to  plant  it;  fourth,  the  excessive  cost  of  land;  fifth, 
insufficient  capital  on  the  part  of  the  settlers;  sixth,  excessive  rates  of 
interest  on  borrowed  money  or  on  deferred  payments;  seventh,  short 
term  payments  that  would  embarrass  the  settlers  who  were  unable  to 


40  LAND    COLONIZATION   AND   RURAL   CREDITS. 

meet  their  obligations;  and  eighth,  improper  marketing  facilities.  In 
how  far  do  these  underlying  causes  that  have  been  named  by  various 
witnesses  agree  with  your  observations? 

A.  All  of  them  to  some  extent  enter  into  the  difficulties  of  proper 
location  of  the  right  settler  on  the  right  piece  of  land  in  California. 
California  is  a  state  of  very  great  resources  and  very  great  differences 
of  quality  of  lands.  There  has  been  a  lack  of  proper  and  accurate 
information  on  the  part  of  the  communities  themselves  in  regard  to 
the  exact  character  of  this  land  and  its  possibilities,  and  there  have 
been  many  glaring  cases  of  poor  land  being  bought  under  wrong  appre- 
hensions as  to  its  quality.  The  Development  Board  has  been  seeking, 
as  almost  its  main  work,  to  secure  accurate  information  in  regard  to 
the  exact  quality  and  productiveness  and  types  of  lands  throughout 
the  state. 

Q.  When  you  speak  of  unfit  settlers,  you  mean  that  promoters  in 
their  eagerness  to  dispose  of  land  have  taken  anybody  who  had  enough 
to  make  the  first  payment  on  the  land,  regardless  of  his  fitness. 

A.  There  has  been  a  well-defined  "back  to  the  land"  movement, 
which  has  been  emphasized  in  California  so  as  to  bring  many  persons 
of  no  agricultural  experience  upon  the  land;  generally  they  have 
gotten  by  very  painfully  or  not  at  all;  and  that  has  contributed  very 
much  to  many  of  the  failures. 

Q.     The  third  cause  is  all-around  ignorance  on  both  sides. 

A.  California  has  been  in  the  habit  of  advertising  widely,  without 
discretion,  and  has  brought  people  upon  all  sorts  of  land  in  California 
without  much  regard  to  their  adaptability. 

Q.     The  next  cause  is  excessive  overcost  of  land. 

A.  There  has  been  a  constant,  upward  tendency  in  the  price  of 
land  in  California  due  to  the  fact  that  much  land  has  been  in  the  hands 
of  promoters  who  sought  to  realize  far  in  advance  of  the  productiveness 
of  the  land. 

Q.  It  has  been  stated  to  us  that  it  has  cost  as  much  as  $60  an  acre  for 
selling  expense,  pure  and  simple,  to  dispose  of  the  land,  the  value  of 
which  in  its  raw  state  is  all  the  way  from  $35  to  $50  an  acre.. 

A.  The  prices  have  been  quite  chaotic  on  some  projects.  They  have 
been  putting  an  undue  burden  on  agriculture. 

Q.  The  next  cause  is  said  to  be  insufficient  capital  on  the  part  of 
the  settler.  That  is,  many  settlers  have  been  led  to  believe  by  liter- 
ature and  representations  made  them  by  promoters,  that  if  they  had 
money  enough  to  make  the  first  payment  on  the  land,  the  land  would 
do  the  rest. 

A.  Conditions  in  California  very  plainly  demonstrate  that  under 
present  conditions  making  small  payments  upon  impossible  land  has 


LAND   COLONIZATION   AND   RURAL    CREDITS.  41 

almost  invariably  led  to  disaster ;  that  people  without  capital  have  not 
been  able  to  take  up  even  government  land,  acquired  without  practi- 
cally any  cost  at  all,  and  make  good  on  it,  however  good  is  the  land; 
that  the  period  of  development  requires  capital,  so  that  California, 
while  widely  advertising  her  land  and  her  resources  throughout  the 
country,  has  no  real  opportunities  to  offer  the  people  who  must  capi- 
talize themselves ;  that  many  eager  people  with  small  capital,  who  have 
had  agricultural  experience,  have  been  utterly  unable  to  avail  them- 
selves of  the  opportunities  offered ;  and  that  California  has  been  denied 
a  great  many  very  valuable  settlers. 

Testimony  of  Mr.  E.  E.  MANHEIM,  vice  president,  Farmers  National 
Bank,  Fresno,  California. 

Q.  Do  you  know  of  any  man  who  conscientiously  could  invite  a 
friend  to  settle  in  California  today  with  a  limited  capital  of  $2,000  or 
$2,500,  which  represents  his  life 's  savings  ?  Could  he  invite  this  friend 
to  settle  here  and  avail  himself  of  the  opportunities  that  are  usually 
offered  by  the  land  colonization  scheme,  that  is,  40  acres  at  $200  an 
acre,  one-fifth  down  and  the  balance  at  two  or  three  or  four  years  with 
interest  at  7  per  cent  or  8  per  cent? 

A.    No. 

Q.  Then  we  know  of  no  man  that  would  invite  a  friend  who  was  a 
homeseeker  to  come  here;  and  on  the  other  hand,  we  have  the  fact 
that  there  is  no  capitalist  who  would  be  willing  to  invest  his  money  in 
a  land  colonization  enterprise  in  California.  Have  we  not  arrived  at 
a  state  of  arrested  rural  development? 

A.    Yes,  we  are  at  the  end.  *  *  * 

A.  I  have  known  instances  almost  parallel  with  the  case  you  cite. 
In  one  instance  the  land  was  sold  at  $250  an  acre;  it  cost  originally 
less  than  $75  an  acre,  with  30  per  cent  as  the  cost  of  selling,  20  per 
cent  for  agents,  and  10  per  cent  overhead  for  the  cost  of  offices  and 
maintaining  the  organization;  and  the  seller  figured  that  he  should 
have  25  per  cent  on  the  sale  of  the  land  for  the  risk  he  took.  Thus 
land  that  cost  originally  less  than  $75  cost  the  settler  $250,  and  there 
were  conditions  under  which  the  settler  could  not  exist. 

Q.  This  land  then  cost  originally  less  than  $75  an  acre,  and  had 
added  to  it  a  burden  of  $75  an  acre  for  selling  cost.  That  would  make 
the  selling  cost  greater  than  the  first  cost. 

A.  I  have  owned  land  in  another  district  that  was  divided  ten  or 
twelve  years  ago.  It  was  bought  and  sold  without  selling  expense;  no 
advertising  and  no  brokerage,  and  the  land  was  sold  at  an  average 
price  of  approximately  $50  an  acre  for  12,000  acres.  It  was  sold  in 
less  than  two  years  to  settlers;  and  most  of  them  have  made  good. 


42  LAND   COLONIZATION   AND   RURAL    CREDITS. 

Q.  It  has  been  pointed  out  that  despite  all  these  handicaps  some 
have  succeeded.  Is  it  not  a  fact  that  a  much  greater  percentage  would 
have  succeeded  if  they  had  had  a  different  proposition  ? 

A.  I  think  that  when  excessive  prices  are  paid  by  the  first  man  and 
he  has  to  relinquish  the  land,  the  next  man,  or  at  least  the  third  man, 
will  get  the  land  at  the  proper  price  and  be  able  to  go  ahead  with  the 
development  and  make  a  success.  *  *  * 

A.  Judging  from  my  experience,  and  it  is  practically  the  same  as 
the  experience  of  other  bankers,  I  think  that  among  men  who  have 
bought  land  here  with  sufficient  money  to  get  fairly  started,  there  have 
been  remarkably  few  cases  of  foreclosure.  There  were  times  when  the 
farmers  were  slow,  but  it  was  simply  a  matter  of  giving  them  time. 

Q.    Your  territory  is  particularly  fortunate. 

A.  The  development  of  the  land  should  be  on  a  different  basis.  It 
is  almost  all  wrong.  At  present  it  is  generally  giving  no  chance  to  the 
settler,  for  the  plan  of  repayment  on  short  loans  is  impracticable  and 
expensive.  Some  other  method  will  have  to  be  found  that  will  not 
subject  the  settler  to  repayment  in  a  few  years  at  a  high  rate  of 
interest. 

Testimony  of  Mr.  C.  B.  MESSENGER,  editor  California  Cultivator,  Los 
Angeles,  California. 

Q.  Do  you  feel,  Mr.  Messenger,  that  private  capital  can  advance 
sufficient  credit  to  this  field  of  rural  credit  to  meet  its  needs  ? 

A.  No.  At  least,  it  has  not.  It  may  be  that  the  reason  the  farmers 
could  not  meet  the  commercial  rates  was  because  of  the  circumstances 
in  which  they  were  placed.  But  if  there  is  some  way  in  which  farmers 
can  get  assurances  of  their  security,  and  if  they  can  get  their  payments 
spread  in  a  reasonable  way,  they  will  be  all  right;  but  it  will  have  to 
be  different  from  now.  I  had  hoped  the  building  and  loan  associations 
would  help  out,  but  they  must  establish  a  credit.  When  they  can 
establish  the  worth  of  their  stock  they  will  be  all  right,  but  I  do  not 
think  that  their  loans  will  be  a  drop  in  the  bucket  compared  with  the 
needs  of  development.  A  report  of  an  investigation  of  the  equipment 
of  farmers  shows  that  not  half  of  them  were  properly  equipped  as  to 
stock  and  implements,  so  that  if  the  need  for  equipment  should  be  met, 
you  can  see  how  much  capital  would  be  required. 

Testimony  of  Mr.   MARSHALL   STINSON,  lawyer   and  landowner,   Los 

Angeles,  California. 

In  this  land  development,  first,  there  is  the  raw  land,  where  men 
start  out;  this  generally  attracts  a  class  of  speculative  farmers  who  go 
to  the  land  in  the  hope  of  selling  at  a  profit.  Then  comes  the  class  of 
homeseekers  who  want  to  make  homes;  their  struggles  are  terrific,  but 


LAND   COLONIZATION   AND   RURAL   CREDITS.  43 

as  a  rule  they  fail.  Third  comes  the  type  of  farmer  who  moves  to  a 
new  town.  You  will  see  him  go  to  the  bank  and  pretty  soon  he  will  be 
located  on  a  piece  of  land  and  will  be  getting  along.  That  man  is  the 
man  you  want  to  benefit.  I  do  not  know  whether  this  plan  will  benefit 
him  directly,  but  it  will  indirectly.  If  there  is  any  way  in  which  funds 
could  be  provided  for  the  country  banker  I  think  it  would  be  a  help  to 
let  him  wrestle  with  the  problems.  It  all  goes  back  to  the  question  of 
marketing.  I  have  had  some  experience  in  the  last  month  with  a  man 
who  borrowed  some  money  to  market  his  crop.  When  he  had  harvested 
the  crop,  the  loan  took  all  his  money. 

It  is  a  serious  thing  to  get  a  loan  at  the  present  time  on  account  of 
the  cost.  For  instance,  if  you  get  money  from  the  insurance  com- 
panies, you  have  to  pay  a  big  fee  to  have  them  look  over  the  title;  in 
many  instances  there  is  a  loan  broker  who  has  to  have  a  commission; 
and  other  expenses  absorb  all  the  money  the  man  has  or  gets  out  of  the 
crops.  The  man  I  am  speaking  of  wanted  to  borrow  money  to  harvest 
his  crop  also,  and  after  he  had  the  money  I  advised  him  to  go  down  to 
the  land  himself.  He  did.  Then  I  told  him  to  go  right  to  the  local 
bank  and  explain  the  situation.  He  did,  but  they  would  not  let  him 
have  money  even  to  purchase  his  cans  and  other  little  things. 

Testimony  of  EDWIN  F.  HARRIS,  bank  cashier,  Commercial  and  Savings 
Bank  of  Stockton. 

Q.  I  take  it  you  are  more  or  less  familiar  with  the  delta  land.  Can 
you  tell  us  how  much  acreage  there  is  there  ? 

A.    No,  it  would  only  be  a  guess  on  my  part. 

Q.  The  delta  lands  include  the  lands  bordering  on  the  Sacramento 
and  San  Joaquin  rivers  and  the  islands  between  them.  Roughly 
speaking,  about  what  acreage  does  that  embrace? 

A.    About  500,000. 

Q.    "What  is  the  value  of  the  delta  lands? 

A.     That  is  pretty  hard  to  answer. 

Q.    What  is  the  minimum? 

A.     From  $75  up. 

Q.     What  is  the  maximum? 

A.     $300. 

Q.    Would  the  average  be  $200  ? 

A.     I  think  so. 

Q.  Then  the  value  of  the  land  is  about  $100,000,000.  About  what 
proportion  of  the  land  is  farmed  by  owners  and  what  proportion  by 
tenants  ? 

A.  I  can  only  guess,  but  I  think  only  25  per  cent  by  owners  and 
75  per  cent  by  tenants. 


44  LAND   COLONIZATION   AND   RURAL    CREDITS. 

Q.  Can  you  estimate  what  proportion  of  that  75  per  cent  are 
Orientals  ? 

A.     I  should  think  possibly  75  per  cent  Orientals. 

Q.    75  per  cent  of  the  75  per  cent  are  Orientals? 

A.    Yes. 

Q.     The  farms  are  rented  at  an  annual  rental  from  year  to  year  ? 

A.    Yes. 

Q.    Has  the  renter  any  assurance  of  the  renewal  of  the  lease  ? 

A.    No,  the  average  land  lease  is  made  for  one  year. 

Q.  Then,  his  lease  of  life  being  brief,  it  is  reasonable  to  assume  that 
he  takes  all  that  he  can  get  out  of  the  soil  and  puts  back  just  as  little 
as  he  can  ? 

A.     That  is  absolutely  the  fact. 

Q.     Is  not  that  steadily  depreciating  the  quality  of  the  soil? 

J..     It  surely  is. 

Q.    What  must  be  the  ultimate? 

A.    Any  one  can  see  that. 

Q.  Then  there  is  $100,000,000  worth  of  property  steadily  depre- 
ciating in  value? 

A.    Yes. 

Q.  "What  is  the  minimum  number  of  acres  in  the  delta  that  would 
support  in  decency  a  white  family? 

A.    Well,  I  do  not  know  exactly. 

Q.  Take  land  in  your  vicinity;  take  a  man  with  a  wife  and  two  or 
three  babies.  What  would  be  the  least  number  of  acres  to  support 
him  in  the  same  manner  he  would  support  himself  if  he  lived  in  the 
city  and  earned  $800  a  year,  which  is  the  average  earning  of  the 
unskilled  laborer?  In  other  words,  how  many  acres  will  he  have  to 
have  to  earn  $800  a  year? 

A.    Five  acres. 

Q.     Then  he  certainly  can  on  ten? 

A.    Well,  one  family  can  not  handle  ten  without  outside  help. 

Q.  Suppose  you  have  ten  acres  to  the  family ;  there  might  be  50,000 
families  there,  might  there  not? 

A.    Yes. 

Q.    In  other  words,  the  land  can  well  support  50,000  families. 

A.     That  is  right. 

Q.  Those  could  live  there  if  they  handled  the  land  properly.  It 
is  reasonable  to  assume  that  if  the  man  owns  the  land  he  is  going  to 
take  care  of  it. 

A.     That  depends  on  the  man. 

Q.    Let  us  assume  we  have  the  right  man. 

A.     The  right  man  will  improve  the  land  and  not  let  it  depreciate. 


LAND   COLONIZATION   AND   RURAL   CREDITS.  45 

Q.  Then  we  have  a  great  land  there.  How  does  it  compare  with 
what  is  said  to  be  the  richest  land  in  the  world,  the  land  along  the  Nile  ? 

A.     I  think,  from  the  reports,  that  it  runs  about  the  highest. 

Q.  Then  we  have,  practically  within  a  stone's  throw  from  the  State 
Capitol,  500,000  acres  of  the  richest  land  in  the  world,  which  when 
improved  would  support  a  very  large  number  of  people.  It  appears, 
then,  that  the  present  situation  is  unfortunate  with  this  richest  land 
in  the  world  being  steadily  depreciated. 

A.     I  feel  that  way  about  it. 

Q.  Would  it  be  worth  while  for  the  state  to  take  up  and  endeavor 
to  solve  the  problem?  If  there  were  a  way  by  which  these  renters 
could  be  replaced  by  white  families,  do  you  feel  that  it  would  be  an 
advantage  to  the  state? 

A.     It  surely  would. 

Q.  As  you  doubtless  know,  the  commission  is  going  through  the 
state,  seeking  information  and  endeavoring  to  come  in  touch  with 
those  who  are  interested  in  this  movement,  looking  at  the  matter  from 
every  angle  so  that  it  may  use  the  highest  intelligence  in  making 
suggestions.  Now,  if  you  have  any  suggestions  that  you  would  like 
to  make  to  the  commission  that  will  be  helpful  we  shall  be  glad  to  have 
them. 

A.  No,  I  do  not  know  that  I  have.  I  am  heartily  in  favor  of  the 
movement.  I  think  the  delta  land  is  suffering  a  great  deal  from  the 
lack  of  that  particular  thing.  We  have  these  renters,  who  only  get 
a  lease  for  one  year  at  a  very  high  figure,  and  they  naturally  attempt 
to  get  every  dollar  from  the  soil  they  can  regardless  of  the  effect  on 
the  soil.  Those  who  are  not  fortunate  enough  to  rent  their  land  to 
these  Orientals,  in  a  great  many  cases  do  not  farm  the  land  at  all. 

Q.  The  present  system  is  then  impoverishing  the  state  instead  of 
enriching  it? 

A.  That  is  the  way  I  feel  about  it.  There  is  a  lack  of  proper  culti- 
vation, a  lack  of  proper  farmers,  and  a  lack  of  proper  handling. 

Testimony  of  J.  A.  AGGLER,  farmer,  Stockton,  California.        , 

Q.  For  your  information  let  me  read  from  the  record,  and  see  if 
you  agree  with  the  views  of  Mr.  Harris  [began  reading  in  the  testi- 
mony of  Mr.  Harris,  October  6,  1915,  at  "I  take  it  you  are  more  or 
less  familiar  with  the  delta  lands"]. 

A.     I  do  not  think  there  are  25  per  cent  of  owners. 

Q.    What  is  your  estimate  of  the  proportion  farmed  by  owners? 

A.     I  would  not  want  to  say ;  but  it  is  very  little. 

Q.     Ten  per  cent? 

A.  Well,  I  am  not  well  acquainted  with  the  situation,  but  I  think 
90  per  cent  and  10  per  cent  would  be  about  right. 


46  LAND    COLONIZATION   AXD   RURAL   CREDITS. 

Q.    How  does  his  estimate  of  Orientals  impress  you? 

A.  I  would  say  there  are  more  Hindus  and  Italians.  It  is  a  fact 
that  these  renters  only  take  what  they  can  out  of  the  soil.  However, 
a  potato  farmer  wants  his  land  but  one  year,  and  then  he  has  to  move 
to  rotate  the  crop ;  so  it  is  not  a  hardship  to  move.  They  raise  potatoes 
a  year,  and  then  beans  and  barley.  That  is  the  way  they  rotate  from 
year  to  year.  The  Italians  and  the  Portuguese  raise  beans  and  the 
Chinamen  raise  the  potatoes,  while  the  Americans  raise  the  grain. 
Sometimes  the  Chinamen  raise  beans.  [At  this  point  Mr.  Weinstock 
read  the  rest  of  the  testimony  of  Mr.  Harris  that  refers  to  conditions 
in  the  delta.] 

Q.    Is  it  your  opinion  that  these  lands  are  steadily  depreciating? 

A.  Yes,  I  asked  a  man  the  other  day  what  he  was  going  to  do  when 
he  could  not  raise  potatoes. 

Q.    What  acreage  would  support  a  family  here,  in  your  estimation? 

A.     Twenty  acres  would  be  plenty. 

Q.     What  is  your  idea  of  the  tenant  situation? 

A.  I  think  that  if  you  have  farmers  or  settlers  they  would  be  better 
than  these  tenants.  Most  of  the  tenants  are  poor  farmers,  and  an 
ordinary  camp  in  the  delta  is  200  acres.  On  the  Rindge  tract  and 
others  there  are  about  200  acres  in  each  camp,  and  that  is  too  big  to 
farm  right.  They  make  big  money  if  they  get  a  good  crop,  but  if 
they  pay  cash  rent  and  don't  get  a  crop  they  will  not  harvest  at  all. 

Q.  Then  if  the  renter  sees  that  he  is  not  going  to  make  anything 
he  throws  up  the  sponge? 

A.  Yes,  if  the  potatoes  do  not  pay  he  will  not  dig  the  crop.  Some 
of  them  rent  for  cash  and  then  sublet  on  shares,  and  some  of  them  pay 
a  cash  rental. 

Q.    Do  you  consider  the  present  conditions  satisfactory  ? 

A.    No,  they  are  not  good  for  the  country  or  the  man  or  the  land. 

Q.  Do  you  agree  with  Mr.  Harris  that  there  is  a  valuable  asset  in 
the  form  of  this  rich  land  that  is  being  steadily  depreciated? 

A.  Yes,  I  do.  A  man  asked  me  a  while  ago  why  my  land  was 
better  than  my  neighbors  and  I  told  them  it  was  because  it  was  better 
worked.  You  can  not  burn  your  straw  or  weeds,  for  the  land  will 
burn  up;  and  others  don't  take  the  trouble  to  get  rid  of  them. 

Q.  Have  you  any  remedy  in  mind  to  meet  these  problems — some- 
thing which  will  bring  about  the  best  conditions  in  place  of  the  worst 
conditions  ? 

A.    Have  the  land  in  small  holdings. 


Several  hundred  settlers  supplemented  the  statistical  information 
furnished,  by  a  statement  of  their  views  regarding  conditions  and 
their  own  prospects.  Four  of  these  are  given.  Each  is  from  a  different 


LAND   COLONIZATION   AND   RURAL   CREDITS.  47 

colony;  and  they  are  fairly  representative  of  the  sentiment  and 
experience  of  settlers  in  all  colonies.  The  name  of  the  settler  and  the 
location  of  the  colony  are  withheld  at  the  request  of  the  settler : 

Mr. of colony 

bought  80  acres  at  $185  an  acre  and  paid  cash  for  it.  Capital  at  time 
of  purchase  $22,300. 

Statement  of  settler:  "In  starting  on  raw  land  the  land  should  be 
bought  from  $50  to  $100  per  acre  for  good  land  to  allow  a  person  to 
improve  and  pay  for  the  land  and  play  safe.  The  rate  of  interest 
should  not  exceed  5  per  cent  and  the  time  should  run  from  20  to  30 
years.  My  prospects  for  success  at  present  look  good  owing  to  my  being 
fortunate  enough  to  keep  out  of  debt  and  carry  myself  along  while 
bringing  the  land  to  a  state  of  production.  No  appreciable  returns  can 
be  expected  here  on  raw  land  short  of  the  third  season. ' ' 

Mr. of colony  bought 

12|  acres  at  $150  per  acre  to  be  paid  for  within  ten  years. 

Statement  of  settler:  "Land  was  sold  to  me  on  following  terms: 
Conditions  of  payment  10  per  cent  cash,  $10  per  month  on  principal 
and  6  per  cent  interest.  When  50  per  cent  is  paid  balance  is  due  and 
payable.  The  promoter  has  been  very  well  paid  for  everything  he  has 
done  here  and  nothing  whatever  has  been  done  without  good  pay  in 
sight.  He  has  not  pushed  purchasers  who  fell  back  in  payments.  He 
has  helped  all  of  us  to  that  extent.  As  to  advice  on  what  to  plant  and 
how,  we  have  looked  out  for  ourselves.  Most  settlers  have  lived  by 
working  for  absent  owners  who  have  their  orchards  planted  on  contract. 
We  have  been  very  much  handicapped  by  inadequate  water  supply. 
Better  marketing  organizations  and  cooperation  are  imperative  for  our 
success.  Our  colony  is  worth  all  it  has  cost  us  and  will  be  a  continued 
success  as  most  orchards  are  well  planted  and  well  cared  for." 

Mr. of colony  bought 

19.1  acres  for  $3,000,  to  be  paid  in  eight  years. 

Statement  of  settler:  "I  paid  just  twice  too  much  for  my  place.  It 
was  worth  just  $1,500.  My  water  contract  does  not  give  me  enough 
water.  With  outside  work  I  will  eventually  succeed.  If  I  could 
borrow  money  at  reasonable  terms  the  problem  would  be  greatly 
reduced  and  my  chances  would  greatly  increase.  The  company  gave 
advice  but  it  was  no  good.  They  also  bought  us  cows  but  they  were  no 
good ;  so  we  got  rid  of  them. ' ' 

Mr. of colony  bought 

10  acres  at  $200  an  acre  to  be  paid  for  within  five  years. 

Statement  of  settler:  "Our  place  has  building  restriction  of  $2,500 
for  dwelling  house  and  this  was  a  hardship  in  the  first  place.  We  com- 
menced by  putting  up  a  shack  and  intended  that  to  do  for  a  few  years, 


48  LAND   COLONIZATION   AND   RURAL   CREDITS. 

but  were  compelled  to  build  the  $2,500  dwelling  in  a  year  from  date  of 
settlement.  We  were  running  a  general  painting  business  during  the 
time  and  continued  to  do  so  as  there  was  nothing  to  make  from  the 
land  for  the  first  year,  and  we  found  by  the  second  year  that  the 
alfalfa  did  very  little  better  than  the  first.  In  my  estimation  our  soil 
was  too  heavy  for  alfalfa,  but  we,  inexperienced  in  farming,  did  not 
know  better.  And  again,  the  contractor  who  checked  and  sowed  our 
land  for  alfalfa  said  it  was  not  necessary  to  plow  it,  so  it  was  first 
checked,  irrigated  and  disked  before  sowing,  which  we  found  later  was 
wrong,  as  it  should  have  been  plowed  very  deep  to  break  up  the  plow- 
pan  which  was  very  hard  on  the  heavy  soil.  I  can  see  no  way  of 
paying  for  this  land  without  working  at  something  outside  of  the 
farm,  and  it  will  be  almost  impossible  then,  because  the  farm  is  neg- 
lected when  I  do  so.  In  the  first  place  the  price  of  the  land  was  too 
high.  Second,  no  competent  advice  on  what  was  suitable  for  the  soil 
and  how  to  prepare  the  soil  properly  for  the  crop  was  given. ' ' 

The  statistics  of  the  cost  of  farms  and  the  income  from  them,  the 
testimony  of  scores  of  able  and  experienced  men,  the  unfortunate 
Private  number  of  settlers  who  have  failed,  the  regretable  mis- 

colonization  representation  which  has  characterized  the  operations  of 
unsatisfactory  many  land-selling  agents,  and  the  extensions  of  time 
which  have  had  to  be  given  by  colonization  enterprises,  all  lead  to  the 
conclusion  that  private  colonization  in  this  state  has  been  costly  and 
unsatisfactory  and  that  some  more  efficient  and  economic  system  must 
be  devised. 

This  brings  up  for  discussion  the  causes  for  this  failure.  It  is  only 
through  having  these  causes  clearly  understood  that  a  foundation  for 
adequate  reform  can  be  laid. 

BEGINNING  OF  SPECULATIVE  LAND  COLONIZATION 
About  the  beginning  of  this  century  California  presented  an 
unusually  attractive  field  for  colonization  enterprises  and  for  the 
Attractive  field  speculative  buyer  of  farm  lands.  The  large  wheat  and 
for  speculation  stock  ranches  could  be  bought  at  very  low  figures. 
They  were  in  the  same  state  and  often  in  the  same  county  where 
orange  groves,  orchards,  and  vineyards  were  selling  for  prices 
unthought  of  in  other  parts  of  the  United  States.  The  question 
naturally  arose,  "What  is  to  prevent  buying  these  large  areas  and  by 
the  simple  device  of  subdivision  selling  them  for  the  far  higher  price 
being  paid  for  small  improved  farms?" 

In  no  other  part  of  the  United  States  was  there  so  wide  a  difference 
between  the  price  of  improved  and  unimproved  land.  Wheat  farms, 
already  provided  with  water  for  irrigation,  or  which  could  be  irrigated 
at  a  reasonable  cost,  could  be  bought  for  from  $10  to  $50  an  acre.  Some 


LAND   COLONIZATION   AND   RURAL   CREDITS.  49 

of  these  farms  had  the  same  soil  and  climate  as  the  orchards  and 
vineyards  which  were  selling  for  from  $100  to  $1,000  an  acre.  The 
immigrant,  from  the  corn-growing  states  of  the  Middle  West  or  from 
Ignorance  of  cost  the  shops  and  stores  of  Eastern  cities  had  no  concep- 
of  improving  land  tion  of  the  amount  of  money  and  time  required  to 
convert  ungraded,  uncultivated  land  into  dairy  farms  or  orange  groves. 
He  could  easily  be  induced  to  pay  almost  the  price  of  the  planted  and 
producing  orchard  and  vineyard  for  the  unimproved  wheat  field.  The 
purchase,  subdivision  and  closer  settlement  of  farm  land  became,  there- 
fore, an  important  business  in  which  thousands  of  men  were  engaged. 
Real  estate  operators  from  the  overdone  and  less  profitable  fields  of 
the  Middle  West  flocked  to  this  new  Eldorado,  not  to  develop  agricul- 
Agriculture  ture  in  California,  but  to  exploit  it.  It  was  the  paradise 
exploited  of  the  boomer  because  in  rural  advantages  and  attractions 
the  state  stands  alone.  In  no  other  state  can  such  a  wide  range  of  crops 
or  so  many  high  priced  products  be  grown.  No  other  state  affords  the 
farmer  or  fruit  grower  an  equal  opportunity  to  exercise  intelligence 
and  scientific  knowledge  in  planning  his  work. 

SPECIAL  KNOWLEDGE  AND  SKILL  REQUIRED 

To  get  good  results,  however,  more  is  required  than  simply  a  sub- 
division of  farms  and  an  inflation  of  land  prices.  Not  every  man  is 
suited  to  become  an  orange  grower  or  has  the  habits  of  careful  thorough- 
ness needed  in  intensive  culture  of  any  kind.  To  create  communities 
like  Redlands  in  the  south  or  the  Santa  Clara  Valley  in  the  north 
requires  workers  of  superior  intelligence.  If  not  already  trained,  they 
must  be  willing  to  undergo  an  apprenticeship  in  a  most  exacting  form 
of  agriculture,  which  makes  far  greater  demands  in  the  way  of  knowl- 
edge and  skill  than  is  required  in  the  fertile  corn  and  wheat  growing 
states  of  the  Middle  West. 

COLONIZATION  SHOULD  BE  IN  ACCORD  WITH  PREARRANGED  PLANS 
The  best  results  in  California  can  only  be  secured  when  colonization 
is  carried  out  in  accordance  with  carefully  thought  out  plans  having 
Community  in  view  the  creation  of  a  definite  form  of  agriculture  or 
welfare  not  horticulture.  This  fact  has  not  been  recognized  by  the 
regarded  speculative  colonizing  agent.  He  gave  no  more  thought 
to  community  welfare  or  to  the  ultimate  results  of  his  enterprise  than 
he  would  to  the  results  of  buying  or  selling  grain  or  coal.  Land  to 
him  was  merchandise  to  be  bought  at  the  cheapest  possible  price  and 
sold  for  as  much  money  as  the  settler  could  be  induced  to  pay. 


4—27025 


50  LAND   COLONIZATION   AND   RURAL    CREDITS. 

The  inevitable  tendency  of  this  kind  of  development  is  to  inflate 
prices.  To  promote  this  inflation  in  California  nearly  every  device 
Prices  inflated;  which  human  ingenuity  could  contrive  was  utilized. 
character  of  In  the  end  it  largely  defeated  the  primary  object, 

colonists  lowered  which  was  profit,  because  as  prices  rose  above  produc- 
tive values  the  number  of  experienced  and  intelligent  buyers  rapidly 
fell  off.  Colonization  agents  had  to  accept  as  settlers  men  less  qualified 
to  judge  of  opportunities  and  hence  less  fitted  to  succeed.  The  search 
for  colonists  had  to  be  extended  and  the  cost  of  finding  them  increased. 
Finally,  the  fishers  for  homeseekers  began  to  angle  for  smaller  fry. 
Instead  of  trying  to  sell  a  living  area  of  80  or  40  acres,  the  farm  unit 
was  cut  down  to  20  acres,  and  then  to  10  and  5  acres ;  and  finally  there 
were  colonies  where  one  acre  was  assumed  to  provide  a  satisfactory 
income  for  a  family. 

COLONIZERS  NOT  DISHONEST 

Relatively  few  of  the  men  engaged  in  this  business  were  knowingly 
dishonest,  but  the  majority  of  them  were  unthinking  and  ignorant. 
They  did  not  know,  nor  did  they  apparently  care  to  know,  how  settlers 
were  to  obtain  the  money  needed  to  improve  and  equip  the  farms  sold 
them  or  how  they  were  to  earn  a  living  income.  The  prosperity  of  the 
settler  was  his  own  affair.  The  land  agent's  business  was  to  make 
money  out  of  him  rather  than  to  make  money  for  him.  The  extent  to 
which  the  land  agent  inflated  prices  in  carrying  out  this  idea  is  illus- 
trated by  the  following: 

A  wheat  ranch  was  bought  for  $7.00  an  acre.  The  buyer  organized  a 
syndicate  composed  of  himself  and  his  stenographer  and  sold  the  land 
Example  of  evil  to  this  syndicate  for  $100  an  acre.  Then  as  a  syndi- 
of  inflated  prices  cate  he  subdivided  the  land  and  sold  it  to  settlers  for 
$200  an  acre.  No  settler  who  paid  the  outrageously  inflated  price  could 
^arn  either  the  purchase  price  or  the  interest  on  it  out  of  the  soil.  Yet 
strange  as  it  may  seem,  sales  of  this  character  were  made  with  ease.  In 
part  this  was  due  to  many  of  the  buyers  being  also  speculators. 
They  bought  these  10,  20  or  40  acre  tracts  exactly  as  they  would 
corner  lots  in  a  boom  town.  They  were  shown  how  land  bought  for 
$7  an  acre  was  selling  for  $200  an  acre,  and  the  prediction  was  made 
that  next  year  it  would  sell  for  $400  an  acre.  This  did  not  seem 
impossible.  The  air  was  full  of  stories  of  the  millions  made  out  of 
subdivisions.  Men  who  were  not  farmers  and  who  never  expected  to  be 
farmers  caught  at  this  prospect  of  quick  and  easy  money  and  paid  a 
deposit  on  10  or  20  acres.  If  there  were  an  early  rise,  they  sold  out 
and  took  the  profit.  If  not,  they  lost  the  first  payment.  Rarely  did 
they  make  a  second  one. 


LAND    COLONIZATION   AND   RURAL   CREDITS.  51 

For  a  time  it  was  comparatively  easy  to  sell  land  to  Eastern  farmers. 
They  had  no  standard  for  comparing  productive  values  in  California 
with  the  kind  of  farming  they  understood.  The  returns  from  a  corn 
First  payment  fold  gave  no  indication  of  what  could  be  made  from  an 
absorbs  too  orange  grove.  When  a  buyer  was  told  that  if  he  had 
much  capital  money  enough  to  make  the  first  payment  the  land 
would  do  the  rest,  he  accepted  this  as  reliable  advice  and  invested 
nearly  all  his  capital  in  a  first  payment.  The  land  did  the  rest,  which 
too  often  was  to  turn  him  adrift  with  the  loss  of  his  money  and  the  gain 
of  some  disagreeable  experience. 

One  colonization  enterprise  bought  about  150,000  acres  at  an  average 
of  less  than  $40  an  acre.  The  average  selling  price  was  started  at 
about  $75,  but  subsequently  was  raised  to  $175  an  acre.  The  agent's 
commission  at  the  higher  price  was  30  per  cent,  so  that  he  was  paid  for 
selling  the  land  considerably  more  than  it  cost. 

On  another  colony  project  an  Eastern  selling  agency  took  the  con- 
tract of  disposing  of  the  land  for  a  commission  of  20  per  cent  on  the 
Agent  takes  the  selling  price.  No  limit  was  placed  on  the  price  the 
money  agent  could  ask ;  so  the  price  of  farms  which  had  been 

selling  for  $150  an  acre  was  raised  to  $400  an  acre  and  the  agents 
thereby  more  than  doubled  their  commissions.  As  the  terms  of  the 
sale  were  one-fifth  cash,  balance  in  four  yearly  installments,  the  selling 
agent  took  all  the  first  payment  and  sought  to  induce  the  settler  to  buy 
enough  land  to  absorb  all  his  capital.  When  this  was  done,  the  agent 
pocketed  the  whole  as  a  commission  for  making  the  sale.  When  the 
project  area  was  all  sold  the  owner  held  the  contracts  of  a  lot  of  money- 
less, inexperienced  people  wrho  were  a  liability  rather  than  an  asset. 
The  selling  agent  had  all  the  coin. 

LACK  OP  BUSINESS  JUDGMENT  ON  THE  PART  OP  SETTLERS 
At  first  colonization  companies  sought  land  and  good  conditions  in 
other  respects.  Later  companies  were  organized  which  held  that  all 
No  regard  for  lands  looked  alike.  The  main  question  was  price.  One 
quality  of  land  who  was  seeking  a  ranch  to  exploit  asked  where  in  the 
great  valleys  of  the  state  he  could  buy  5,000  acres  at  $25  an  acre.  He 
was  told  that  only  hardpan  and  alkali  land  could  be  bought  for  that 
price.  The  reply  was  that  the  quality  of  land  made  no  difference ;  any 
kind  of  land  which  could  be  bought  for  $25  an  acre  could  be  colonized. 
One  tract  of  hog-wallow,  hardpan  land  in  the  Oakdale  district  was 
subdivided  and  traded  for  houses  and  lots  in  Los  Angeles.  Only  three 
purchasers  remain  in  that  colony.  Probably  not  one  of  them  had  any 
intention  of  remaining.  Each  one  sold  a  house  at  a  high  price  and  was 
paid  in  land  at  a  higher  price. 


52  LAND   COLONIZATION   AND   RURAL    CREDITS. 

In  another  district  a  tract  of  "goose"  land  sold  one  year  for  $5.00  an 
acre,  the  next  year  for  $15  an  acre,  and  was  then  subdivided  and  sold 
as  garden  soil  for  $125  an  acre.  Three  brothers  who  were  market 
gardeners  bought  farms  there  and  moved  on  with  their  families.  They 
found  when  the  soil  was  wet  it  was  a  quagmire  and  when  it  was  dry  it 
could  only  be  cultivated  with  dynamite.  In  three  years  time  they  had 
not  raised  enough  to  keep  a  goat  alive  and  had  to  abandon  their  homes, 
losing  their  money  and  time  and  carrying  with  them  a  bitter  feeling  of 
injustice  and  wrong. 

The  lack  of  prudence  and  business  judgment  shown  by  colonists  was 
amazing.  One  with  a  capital  of  $1,575  paid  $1,500  of  it  as  a  first  pay- 
Colonists'  ment  on  a  farm  costing  $7,500.  He  had  $75  left  with 
lack  of  business  which  to  build  a  house,  buy  a  team  and  farm  equipment 
judgment  an(j  pay  living  expenses  until  a  crop  could  be  grown. 
Surrendering  the  $1,500  is  as  far  as  he  ever  got  towards  becoming  a 
farmer  in  California.  Another  colonist  landed  in  one  of  the  settle- 
ments with  a  wife,  four  small  children  and  $1,100.  The  day  he  arrived 
he  turned  over  $1,000  of  his  $1,100  as  a  one-fifth  payment  on  40  acres 
of  land.  At  night  he  had  $100  in  cash  and  a  debt  of  $4,000.  He  faced 
a  large  expenditure  for  house,  team,  tools,  preparation  of  the  soil  for 
cultivation,  all  of  which  must  be  made  before  he  could  earn  a  living 
from  the  land.  Away  from  the  persuasive  magic  of  the  agent,  he 
realized  how  impossible  was  the  task  and  the  next  morning  he  applied 
to  the  owner  of  the  land  for  the  return  of  his  money.  The  owner  told 
him  that  all  of  the  first  payment  had  been  pocketed  by  the  agent  as 
commission,  and  that  not  only  had  the  landowner  received  nothing  out 
of  the  $1,000,  but  on  the  contrary  owed  the  agent  $500  because  he  had 
agreed  to  pay  30  per  cent  commission  on  the  selling  price.  This  settler 
and  his  family  also  gave  up  home  making  in  California  and  spent  their 
remaining  $100  in  getting  out  of  the  state. 

WHERE  LANDOWNERS  SOLD  DIRECTLY  TO  SETTLERS  RESULTS  USUALLY 

SATISFACTORY 

It  is  to  the  credit  of  some  California  landowners  that  they  were  not 
carried  away  by  this  speculative  inflation,  but  continued  to  sell  land  -at 
relatively  low  prices  and  to  sell  only  to  those  who  were  believed  to 
have  a  reasonable  chance  of  success.  Later  on  some  instances  of  this 
will  be  given.  We  are  now  dealing  with  those  features  of  unregulated 
colonization  which  show  the  need  for  state  supervision. 

Few  of  the  colony  lands  of  California  have  been  sold  directly  by  the 
owners.  In  most  cases  subdivision  and  sale  was  entrusted  to  a  selling 
Misrepresentation  agent  and  he  in  turn  employed  many  assistants  or 
due  to  agents  divided  his  commission  with  others.  Many  of  those 
with  whom  the  colonist  dealt  were  itinerant  and  irresponsible  and  most 


LAND   COLONIZATION   AND   RURAL   CREDITS.  53 

of  the  misrepresentation  and  disregard  of  settlers'  interests  were  due 
to  these  subordinates. 

Where  landowners  have  dealt  directly  with  settlers,  there  has  been 
little  complaint  and  there  are  notable  instances  where  the  owner  has 
assumed  a  moral  responsibility  for  the  settler's  success,  although  there 
was  no  legal  liability. 

EXCESSIVE  COMMISSIONS  TO  AGENTS 

In  time  there  were  more  farms  than  colonists.  The  number  of  home- 
seekers  was  falling  off.  The  percentage  who  bought  was  declining. 
It  took  more  money,  time,  and  ability  to  sell  land  for  $150  to  $300 
an  acre  than  to  sell  it  for  one-third  these  figures.  To  meet  the  greater 
expenses  commissions  rose  from  5  per  cent  and  10  per  cent  to  20  per 
cent  and  30  per  cent  and  even  40  per  cent  of  the  selling  price.  In  one 
colony  where  the  land  before  subdivision  was  offered  for  sale  for  $40 
an  acre,  the  agent's  commission  after  subdivision  was  $80  an  acre. 

SPECULATIVE  SETTLEMENT  HAS  ENDED 

This  speculative  colonization,  which  began  about  1900  and  reached 
its  culmination  about  fifteen  years  later,  has  now  run  its  course.  It 
worked  infinite  harm  to  many  honest,  industrious,  but  oversanguine 
and  credulous  homeseekers.  It  interrupted  and  changed  the  character 
of  the  conservative  and  successful  development  which  was  going  on 
when  it  began.  It  has  enabled  nonresident  speculators  to  take  away 
from  the  state  millions  of  dollars  as  the  profits  of  an  unwarranted 
inflation  of  prices  and  it  has  caused  or  will  cause  anxiety  and  heavy 
losses  to  many  landowners  who  are  depending  on  settlers  without 
either  capital  or  experience  to  pay  off  mortgages.  It  has  left  a  legacy 
of  high  land  prices  which  threatens  to  be  a  heavy  economic  burden 
on  the  state.  Practical,  experienced  farmers  will  not  come  to  Cali- 
fornia if  land  of  equal  productive  value  in  other  states  is  cheaper. 

Cheap  production  goes  with  cheap  land.  High  land  prices  mean 
higher  taxes  and  larger  interest  charges.  These  have  to  be  paid 

_,      .       .  through  higher  prices  for  products  or  a  lower  stand- 

JKesults  ot  specu-  . 

lation:  Higher  ard  °*  living  for  farmers.  The  milk  producers  who 
prices  for  products  supply  San  Francisco  are  asking  a  higher  price  for 
or  lower  milk.  In  showing  the  need  for  this  one  dairyman 

standard  of  living  expiained  that  ten  years  ago  he  only  paid  $800  a  year 
rent  for  the  land  on  which  his  dairy  herd  feeds.  Later  on  this  rent 
was  raised  to  $1,700  a  year;  and  he  has  now  notice  of  an  increase  to 
$2,500  a  year.  The  owner  of  the  land  has  made  no  improvements;  it 
produces  less  food  for  the  dairy  herd  than  it  did  when  the  rent  was 
low.  In  this  case  the  rental  cost  has  been  raised  $1,700  a  year.  The 


54  LAND    COLONIZATION   AND   RURAL   CREDITS. 

only  way  to  increase  the  income  is  by  raising  the  price  of  milk.  In 
this  case,  and  in  many  other  cases  which  have  been  brought  to  our 
attention,  higher  rent  means  higher  cost  of  food. 

Where  these  results  are  due  to  speculative  manipulation  of  land 
prices  they  are  an  economic  evil  with  no  compensating  public 
advantage. 

WHY  COLONIZATION  IN  CALIFORNIA  SHOULD  BE  UNDER  PUBLIC  CONTROL 
In  the  greater  part  of  the  United  States  there  has  been  little  need  of 
public  supervision  of  rural  development.  The  kind  of  crops  which  can 
be  grown  or  the  preliminary  outlay  required  are  both  restricted  to  such 
narrow  limits  that  little  variation  in  methods  is  possible.  It  is  other- 
wise in  California.  Here  much  of  the  best  land  has  to  be  irrigated,  a 
large  percentage  needs  to  be  drained,  and  some  has  to  be  protected 
against  floods.  Every  acre  of  irrigated  land  must  have  a  right  to 
water  and  the  character  of  that  right  is  about  as  important  as  the 
validity  of  the  land  title.  To  prepare  some  areas  properly  for  settle- 
ment involves  an  immense  expenditure  of  money.  Ultimate  results 
Expert  advice  depend  quite  largely  on  the  honesty  and  efficiency 
needed  by  settlers  of  those  in  charge.  Some  colonization  enterprises 
have  not  taken  their  obligations  in  these  matters  as  seriously  as  they 
should. 

It  is  practically  impossible  for  an  immigrant  from  a  humid  section 
to  protect  himself  from  misrepresentation  in  this  matter.  A  native  son 
finds  it  difficult.  One  who  bought  land  guaranteed  to  have  an  ample 
water  supply  for  irrigation  with  an  undisputed  right  thereto  found 
after  purchase  that  the  supply  was  good,  but  was  300  feet  below  the 
surface,  and  the  water  right  was  unquestioned  because  no  one  could 
afford  to  dig  for  it. 

SPECIAL  NEED  FOR  PUBLIC  SUPERVISION  OF  COLONY  PLANS  IN 

IRRIGATED  AREAS 

Water  and  climate,  as  well  as  soil,  influence  the  value  of  agricultural 
land  in  much  of  California.  Wherever  irrigation  is  required  colony 
plans  should  provide  for  the  efficient  use  of  streams.  The  need  for  this 
has  not  been  realized  in  the  past  because  when  the  demands  on  streams 
are  small  economical  use  is  ignored.  But  as  the  irrigated  area  extends 
and  population  increases,  so  does  the  demand  for  water  increase,  and 
the  struggle  for  its  control  increases  in  a  like  measure. 

'  In  great  irrigable  areas  like  the  San  Joaquin  and  the  Sacramento 
valleys  all  agricultural  development  will  in  time  be  bound  together 
Coordinated  by  a  common  dependence  on  the  streams.  For  this 

action  necessary  reason  the  ultimate  results  will  be  more  satisfactory 
if  colonization  is  carried  out  in  accordance  with  a  carefully  thought 


LAND   COLONIZATION   AND   RURAL   CREDITS.  55 

out  plan  which  will  embrace  all  the  irrigable  land  in  each  watershed. 
Confusion  is  coming  upon  us  because  we  are  working  without  direc- 
tion, cooperation  or  plan. 

Nowhere  is  the  need  for  coordinated  action  more  clearly  shown  than 
under  the  Crocker-Huffman  canal.  This  water  system  can  be  made 
to  irrigate  a  hundred  thousand  acres  of  land.  Although  privately 
owned,  its  magnitude  and  the  number  of  people  dependent  upon  it 
gives  it  a  public  character.  From  time  to  time  individuals  or  com- 
panies have  bought  tracts  of  land  varying  from  a  few  hundred  to  sev- 
eral thousand  acres,  subdivided  them,  made  a  contract  with  the  Crocker- 
Huffman  Company  for  water,  and  then  sold  the  land  with  a  water  right 
to  colonists.  There  are  now  fifty-two  colonies  under  this  system. 
These  have  no  organic  relation  to  each  other  and  no  voice  in  the  man- 
agement of  the  canal.  The  water  right  agreements  in  the  different 
colonies  are  not  the  same  and  the  prices  paid  for  water  vary  widely. 
Example  of  lack  -^s  a  result  there  is  much  friction  which  has  led  to 
of  coordination  litigation  and  threatens  more.  It  would  be  better 
Crocker-Huffman  for  all  concerned  if  there  were  one  water  right  con- 
canal  tract,  one  charge,  and  a  management  in  which  all 

irrigators  could  participate.  In  other  words,  what  began  as  a  private 
undertaking  has  by  its  growth  assumed  a  public  character,  in  which 
necessary  adjustments  are  far  more  difficult  to  make  than  they  would 
have  been  if  thought  out  in  the  beginning. 

This  situation  might  be  ignored  if  we  were  nearing  the  end  of  devel- 
opment. But  we  are  only  in  the  beginning.  On  nearly  every  tributary 
Crocker-Huffman  of  the  San  Joaquin  and  Sacramento  rivers  there  are 
situation  typical  similar  conditions.  There  is  probably  no  other  canal 
which  supplies  fifty-two  colonies.  There  are,  however,  irrigation  dis- 
tricts and  irrigation  systems,  each  with  a  large  number  of  colonies 
operating  without  relation  to  each  other  and  nearly  all  of  them  feeling 
a  need  for  coordination,  for  uniformity,  for  more  efficient  distribution 
and,  looming  in  the  near  future,  for  the  need  for  an  immense  expendi- 
ture of  money  in  the  construction  of  storage  works.  These  works  ought 
to  be  built,  but  the  difficulty  is  to  get  the  unorganized  colonies  to  agree, 
and  in  the  absence  of  agreement  to  secure  money  at  reasonable  rates 
of  interest. 

It  has  been  proposed  that  the  state  guarantee  bonds  and  provide  this 
money,  and  the  lower  rate  of  interest  which  this  would  insure  justifies 
its  careful  consideration.  But  before  that  is  undertaken  the  whole 
plan  of  development,  the  location  of  lands  to  be  irrigated  and  a  definite 
conclusion  as  to  how  canal  systems  ought  to  be  operated  should  be 
thought  out,  this  being  all  a  part  of  the  general  problem  of  colonization. 


56  LAND  COLONIZATION  AND  RURAL  CREDITS, 

NEED  FOR  ADVICE  ABOUT  SOIL  AND  CLIMATE 

The  quality  of  the  soil  in  California  varies  greatly  and  abruptly. 
There  are  quarter  sections  of  land  of  which  parts  are  rented  for  $20 
Variations  an  acre  and  parts  will  not  rent  for  $1.00  an  acre.  On  one 
in  soil  side  of  the  fence  land  sells  for  $150  an  acre  and  is  worth 

the  price.  On  the  other  side  it  is  not  worth  $10  an  acre.  The  settler 
should  not  be  left  to  find  out  these  facts  after  having  parted  with  his 
money.  There  ought  to  be  a  soil  survey  of  all  colony  lands. 

From  Maine  to  the  borders  of  California  the  buyer  of  a  farm  knows 
or  can  easily  learn  the  limit  which  climate  puts  on  the  crops  he  can 
Influence  grow.  He  knows  that  there  is  a  summer  season  of  seed 
of  climate  time  and  harvest  and  a  winter  season  of  stagnation.  In 
California  he  finds  all  these  climatic  limitations  set  aside.  In  much  of 
the  state  there  is  no  dead  season.  Crops  can  be  planted  every  month  of 
the  year.  Temperature  ceases  to  be  controlled  by  latitude  and  oranges 
ripen  as  early  and  as  surely  at  Oroville  in  northern  California  as  at 
Riverside  in  southern  California.  Elevation,  on  the  contrary,  exer- 
cises an  influence  not  realized  by  most  settlers.  At  a  certain  elevation 
the  land  may  have  a  high  value  for  citrus  fruits,  because  it  is  in  the 
frostless  belt;  100  feet  below  frosts  may  make  the  growing  of  oranges 
too  hazardous  to  be  profitable. 

The  factors  of  soil,  climate,  water  supply,  and  markets,  which  affect 
the  value  of  land  and  the  well-being  of  settlers,  are  so  important  that 
Best  results  they  make  of  colonization  a  scientific  problem.  The  best 
obtained  by  results  to  the  state  can  only  be  secured  by  recognizing 
organization  ^his  an(j  invoking  and  using  scientific  knowledge  in 
shaping  our  future  development.  The  nature  of  land  ownership  and 
the  need  for  community  organization  for  the  distribution  of  irrigating 
water,  for  drainage,  and  for  the  marketing  of  crops  requires  that  at  the 
basis  of  all  colonies  there  should  be  a  sound  economic  and  social  organi- 
zation. It  is  largely  because  we  have  not  recognized  this  that  73 'per 
cent  of  California's  growth  in  population  during  the  five  years  from 
1910  to  1915  was  in  the  cities,  and  that  the  .increase  in  the  farming 
population  was  so  small  as  to  be  disquieting.  Rural  settlement  is  not 
keeping  pace  with  the  city  settlement,  although  each  year  immense  sums 
of  money  are  spent  by  railroads,  counties*  and  commercial  bodies  in 
calling  attention  to  the  attractions  of  rural  California. 

REASON  FOR  DECREASE  IN  RATE  OF  SETTLEMENT 
The  falling  off  in  the  number  of  landseekers  in  the  last  two  or  three 
years  has  not  been  confined  to  California.  It  has  been  equally  marked 
High  price  of  in  other  Western  states.  The  principal  reason  for  it 
unimproved  land  everywhere  is  the  high  price  of  unimproved  land. 
With  a  suddenness  that  prevents  our  realizing  it,  we  have  reached  a 


LAND   COLONIZATION   AND   RURAL   CREDITS.  57 

situation  in  "Western  irrigation  districts  where  a  man  with  from  $1,000 
to  $3,000  capital  has  no  better  chance  of  becoming  a  farm  owner  than 
did  the  peasant  farmer  in  Europe  a  generation  ago.  The  acreage  cost 
of  the  irrigated  farm  in  many  new  sparsely  settled  districts,  is  greater 
than  the  acreage  cost  of  farms  in  the  densely  peopled  sections  of  Eng- 
land and  Germany.  The  purchase  of  farms  has  therefore  become  too 
costly  for  the  men  who  most  need  them  and  who  will  make  the  best 
use  of  them. 

For  a  time,  in  California  as  in  other  states,  the  colonist  with  limited 
capital  believed  that  he  could  continue  to  do  what  the  man  who  had 
Man  of  small  obtained  free  public  land  had  done,  that  is,  pay  for 
means  can  not  a  farm  by  his  unaided  efforts.  But  land  which  costs 
purchase  from  §IQQ  to  $150  an  acre  in  its  unimproved  state 

must  be  better  farmed  in  order  to  pay  interest  on  the  higher  cost.  This 
in  turn  means  a  better  equipment  and  a  larger  initial  expenditure.  The 
man  with  small  means  is  therefore  leaving  the  country  or  becoming  a 
tenant  farmer. 

As  the  price  of  land  rises  fewer  persons  want  to  purchase.  The  land 
hunger  is  as  great  as  ever,  as  is  shown  by  the  rush  for  public  land  when- 
Difficulties  lead  to  ever  &  *s  offered.  The  decline  in  settlement  is  due  to 
decline  in  number  the  fact  that  the  difficulties  and  hazards  of  paying 
of  purchasers  for  high-priced  land  are  better  understood.  We 

must  therefore  be  content  with  a  slow  increase  in  rural  population  or 
provide  better  credit  facilities  for  settlers  of  small  capital. 

CHARACTER  AND  ABILITY  OF  SETTLERS  IMPORTANT 
One  feature  of  colonization  which  this  state  can  not  afford  to  over- 
look is  the  need  for  action  which  will  insure  that  the  quality  of  its  col- 
onists is  not  impaired.  The  first  settlers  of  California  were  a  superior 
body  of  men  and  women,  enterprising,  intelligent  and  patriotic.  They 
represented  all  that  was  best  in  American  character.  Owing  to  this 
fact  California  has  become  a  great  state,  a  leader  among  states  in  its 
social  and  political  institutions,  no  less  than  in  the  charm  and  attrac- 
tiveness of  its  rural  life.  It  would  be  a  calamity  if  that  leadership 
should  be  lost  by  impairment  of  the  quality  of  rural  communities. 
This,  it  is  feared,  may  be  expected  if  we  continue  to  seek  as  colonists 
men  who  are  able  and  willing  to  pay  a  high  price  for  land  because  they 
have  a  narrow  view  of  life  and  are  contented  with  a  low  standard 
of  living. 


58  LAND    COLONIZATION   AND   RURAL   CREDITS. 

The  character  and  the  ability  of  settlers  are  of  more  importance  than 
their  number.  No  one  can  estimate  the  value  to  California  of  Professor 
Colonists  of  Hilgard,  Elwood  Cooper,  or  Luther  Burbank.  No  one 
high  quality  are  can  determine  how  much  New  England  gained  from 
necessary  for  the  high  character  of  the  settlers  in  Plymouth.  The 
welfare  of  state  ideals  and  the  high  moral  purpose  of  the  settlers  in 
the  Western  Reserve  in  Ohio  did  much  to  make  that  state  a  breeding 
ground  for  presidents.  The  Greeley  colony  in  Colorado  did  more  than 
perpetuate  the  name  of  a  great  editor.  It  made  irrigated  agriculture 
and  the  creation  of  beautiful  homes  in  the  Rocky  Mountain  region  a 
concrete  reality  and  helped  to  check  the  vicious  acquirement  of  the 
public  domain  by  speculators. 

The  character  of  our  colonists  will  do  more  than  any  other  single 
influence  to  make  California  an  attractive  place  to  live  in  or  a  good 
place  to  avoid.  They  will  be  voters.  Their  children  will  fill  the  rural 
schools,  on  which  we  are  now  spending  annually  about  $6,500,000  to  help 
to  create  good  citizens.  Our  success  in  this  will  depend  quite  largely  on 
the  kind  of  homes  the  children  come  from  and  the  civic  ideals  which 
their  parents  seek  to  establish.  This  political  side  of  colonization  has 
not  been  given  the  attention  it  deserves.  Steadiness  and  sanity  in  our 
political  life  depend  quite  largely  on  the  influence  and  the  intelligence 
of  the  country  voter. 


LAND   COLONIZATION   AND   RURAL   CREDITS.  59 


PART  III 

PROBLEMS  OF  TENANTRY  AND  FARM  LABOR 

GROWING  MENACE  OF  TENANT  FARMING 

On  account  of  the  great  landed  estates  tenant  farming  has  always 
had  an  important  place  in  the  agriculture  of  California,  but  with  the 
Early  tenants  rise  in  land  prices  and  the  adoption  of  intensive  culti- 
Americans  vation  it  has  taken  on  a  new  and  less  desirable  aspect. 

In  the  earlier  history  of  California  the  tenant  farmer  was  usually  an 
integral  part  of  the  community.  He  was  an  American  with  an  interest 
in  national,  state,  and  local  affairs,  as  ready  as  the  landowner  to  work 
for  the  upbuilding  of  the  neighborhood. 

In  recent  years,  however,  there  have  been  growing  up  in  California 
tenant  communities  made  up  almost  entirely  of  Asiatics  or  of  peasants 
Increase  of  from  those  portions  of  Europe  where  life  is  sordid 

foreign  tenants  and  the  standards  of  living  are  low.  These  tenants 
of  low  standards  have  no  interest  in  community  needs.  They  main- 
tain their  racial  indifference  and  aloofness.  They  are  not  a  contribu- 
tion to  our  political  or  social  strength.  They  are  willing  and  able  to 
pay  high  rents,  not  because  their  methods  of  farming  are  better,  though 
as  a  rule  they  are  good  farmers,  but  because  they  live  more  frugally 
than  the  American  or  the  immigrant  from  Northern  Europe.  In  other 
words,  while  Northern  Europe  is  lifting  the  peasant  farmers  into  a 
more  independent  and  generous  life,  California  is  creating  conditions 
which  are  in  some  cases  worse  than  those  of  the  European  peasant, 
because  the  European  landlord  had  certain  obligations  founded  on 
feudal  customs  and  supported  by  public  opinion  which  do  not  exist  here. 
"The  English  landowner  who  deprived  an  old  tenant  of  possession 
because  a  new  tenant  was  ready  and  able  to  pay  a  higher  rental  for- 
Contrast  feited  social  consideration.  In  America  the  land- 

between  America  owner  was  subject  to  no  such  restriction.  If  he 
and  England  rented  his  land  he  was  expected  to  get  what  he  could. 

If  he  sold  it  he  was  expected  to  sell  it  at  the  highest  price  obtainable. 
As  long  as  he  did  not  rent  his  property  to  people  who  would  use  it  for 
immoral  purposes,  or  sell  it  to  notoriously  undesirable  citizens,  the  pub- 
lic would  not  condemn  him  for  seeking  the  best  market  he  could  get. ' ' 
Hadley:  "Undercurrents  in  American  Politics"  (p.  60). 


60  LAND   COLONIZATION   AND   RURAL   CREDITS. 

It  is  undoubtedly  true  that  many  landowners  can  obtain  a  higher 
return  from  their  land  by  renting  it  than  in  any  other  way.  It  is  prob- 

Community  ^ly  true>  a^s0'  ^a*  ^e  c*ass  °^  Pe°ple  w^°  fQrm  ^e 

life  of  tenants  bulk  of  the  tenantry  are  living  better  than  ever  before, 
undesirable  But  this  does  not  mean  the  kind  of  community  life 

which  is  being  created  is  desirable  or  that  the  sort  of  development  which 
is  going  on  can  become  permanent  or  be  extended  without  lowering  the 
standard  of  this  state's  civilization. 

This  seems  an  appropriate  place  to  quote  a  portion  of  the  report  of 
Mr.  T.  Chamberlain,  one  of  the  graduate-student  investigators  on  con- 
ditions in  Placer  County. 

TENANTRY  FROM  A  BUSINESS  STANDPOINT 

"If  we  consider  that  business  is  good  wherever  money  is  being 

made,  then  we  must  say  that  business  is  good  in  the  fruit  belt,  for 

Tenantry  ^  *s  customary  for  owners  to  make  10  per  cent  and 

from  business      even  ^  Per  cen*  on  ^heir  investment.     One  owner 

standpoint  states  that  any  man  with  a  40-acre  ranch  can  rent 

to  Japanese  and  make  from  $1,200  to  $2,000  a  year 

without  ever  going  near  it.     Several  owners  stated 

that  they  would  not  be  able  to  make  money  without  the  Japanese 

and  said  that  before  the  Japanese  came  the  fruit  business  was  not 

as  profitable  as  it  is  now. 

"When  the  owner  makes  money  the  tenant  also  prospers.  Mr. 
Snelling,  who  superintends  twenty-two  ranches,  states  that  the 
tenants  average  $1,000  a  year.  A  number  of  Japanese  tenants 
have  become  quite  wealthy  and  have  returned  to  Japan. 

"From  a  money-making  standpoint,  the  present  system  of  ten- 
antry seems  satisfactory  to  both  the  tenants  and  the  owners. ' ' 

TENANTRY  FROM  A  SOCIAL  STANDPOINT 

' '  There  can  be  no  more  conclusive  proof  of  the  need  for  a  sound 
policy  of  land  settlement  than  the  social  conditions  which  prevail 
at  the  present  time  in  the  Placer  County  fruit  belt. 

' '  In  the  vicinity  of  Penryn  there  are  eight  ranches  being  run  by 
owners,  while  sixty  are  rented.  Although  the  proportion  of  rented 
ranches  in  other  sections  is  smaller,  fully  50  per  cent  of  the  ranches 
for  the  entire  fruit  belt  are  rented.  There  are  about  twenty 
ranches  in  the  vicinity  of  Penryn  whose  owners  live  outside  the 
county.  The  resident  owners  in  many  cases  work  elsewhere.  It  is 
a  common  experience  to  find  four  or  five  fruit  ranch  owners  working 
for  a  salary  in  a  fruit  house.  Some  of  the  town  people  say  a  man 
can  not  get  a  job  in  a  fruit  house  unless  he  owns  a  ranch  and  ships 
his  fruit  through  the  house  affording  him  employment.  Among  the 
owners  who  are  not  employed  off  the  ranches,  some  spend  their 
time  in  improving  their  places,  attending  to  the  irrigation,  and 
even  working  for  their  own  tenants  for  wages,  but  the  greater 
number  spend  their  time  in  their  automobiles. 


LAND   COLONIZATION   AND   RURAL    CREDITS.  61 

"Not  only  is  the  problem  one  of  tenancy  and  absentee  land- 
lordism, but  the  question  of  the  large  landowner  enters  in.  In  the 
Tenantry  from  Penryn  district  one  company  owns  sixteen  ranches 
social  standpoint  an(^  rents  six  more.  All  these  ranches  are  rented 
deplorable  *°  JaPane£!e  an(l  a  superintendent  spends  his  time 

motoring  from  one  ranch  to  another.  A  number 
of  other  ranchers  own  from  two  to  six  places.  Five  men  in  the 
Penryn  district  own  twenty  ranches  between  them. 

' '  The  result  of  these  rented  ranches,  absent  landlords,  and  large 
holdings  is  a  most  deplorable  social  condition.  After  looking  out 
over  the  country  surrounding  Penryn  and  seeing  the  luxuriant 
development  of  the  fruit  ranches  and  the  many  large  residences, 
one  expects  to  find  a  prosperous  and  thriving  community.  But  on 
investigation  it  is  found  that  almost  all  of  these  large  houses  are 
vacant  and  in  place  of  a  prosperous  town  there  is  only  a  lingering 
memory  of  conditions  as  they  used  to  be.  The  owners  who  pre- 
viously worked  their  own  places  and  built  these  homes  have  now 
rented  to  the  Japanese  and  moved  elsewhere  to  live.  It  is  con- 
fidently stated  by  older  residents  that  Penryn  was  a  better  town 
twenty  years  ago  when  the  surrounding  country  had  not  even 
approached  its  present  development.  Socially,  the  community  is 
dead." 

What  is  known  as  the  Delta  District  in  California  is  perhaps  one  of 
the  richest  tracts  of  farming  land  in  the  United  States.  With  its 
climatic  advantages,  it  ought  to  be  one  of  the  most  progressive  and 
prosperous  rural  communities  to  be  found  anywhere.  Material  advan- 
tages in  the  way  of  soil  and  climate  ought  to  produce  desirable  social 
and  economic  conditions.  If  they  do  not,  there  is  evidence  of  something 
wrong  in  our  policy. 

This  Delta  District  has  an  area  of  approximately  300,000  acres.  On 
it  are  a  few  fine  homes,  nearly  all  of  them  vacant  because  the  owners 
have  given  them  up  and  departed  for  the  city.  This  rich  district  is 
practically  given  over  to  tenants.  They  live  in  tents  or  houses  that  are 
unsanitary  and  devoid  of  beauty  or  conveniences.  They  pay  rents  that 
compare  unfavorably  with  some  of  the  examples  of  rack  rented  tenant 
farming  in  Europe.  All  of  the  leases  are  for  a  short  time,  usually 
from  one  to  three  years,  with  some  extending  over  five  years.  Thus  the 
Social  and  economic  great  body  of  cultivators  have  no  interest  in  corn- 
conditions  of  munity  welfare.  Besides,  they  are  mainly  aliens, 
Delta  District  bad  Japanese,  Chinese,  Hindus,  and  Portuguese  pre- 
dominating. None  of  these  tenants  give  any  attention  to  maintaining 
the  fertility  of  the  soil ;  as  a  rule  there  is  no  rotation  of  crops.  The  land 
is  cultivated  until  it  becomes  unprofitable  and  then  the  tenant  moves. 
The  summary  in  Mr.  Edwin  E.  Cox's  report  serves  to  render  it  apparent 
to  any  one  who  regards  California  otherwise  than  simply  as  a  place  to 


62  LAND   COLONIZATION   AND   RURAL   CREDITS. 

make  money  that  tenant  farming  here  is  even  less  desirable  than  in 
other  parts  of  this  country: 

' '  Aside  from  the  rapidly  growing  Asiatic  element  that  can  not  be 
assimilated,  the  white  contingent  of  California's  tenant  class  are 
generally  living  under  conditions  inimical  to  democratic  citizen- 
ship. The  tenant's  children  can  not  make  the  desired  progress  in 
education,  as  they  are  constantly  moving  from  one  school  district 
to  another.  The  parents,  because  of  their  transitory  life,  take 
little  interest  in  the  schools;  first,  for  failure  to  appreciate  their 
value,  and,  secondly,  because  the  children  are  obliged  to  help  in 
the  exacting  routine  of  the  family's  existence.  Neighborhood 
solidarity,  so  important  in  communities  of  home  owners,  is  seriously 
lacking  in  sections  given  over  to  tenantry  and  the  commonwealth 
must  correspondingly  suffer. 

"In  addition  to  the  social  disadvantage  of  our  admixture  of 
Oriental  and  transitory  white  tenantry,  their  economic  condition 
is  even  worse,  because  as  this  report  shows,  the  average  tenant, 
whether  growing  decidious  fruits,  grain,  or  vegetables,  is  wholly 
at  the  mercy  of  the  commission  man.  From  one  to  three  or  four 
liens  frequently  cover  his  crop  before  it  is  harvested,  and  lack  of 
a  certain  permanency  as  well  as  want  of  money  causes  him  to 
rob  the  soil  of  its  fertility,  prevents  eradication  of  pests,  and 
lastly,  compels  him  to  'dump'  his  produce  into  the  hands  of  the 
commission  man  at  harvest  time  at  the  latter 's  price  (usually 
the  lowest  of  the  year),  leaving  the  tenant  little  better  off  finan- 
cially than  the  year  before,  with  no  recourse  but  that  of  trying 
again  next  year,  perhaps  in  a  new  location." 

BETTER  PROVISIONS  FOR  FARM  LABOR 

Intelligent,  reliable  farm  labor  is  a  growing  need  of  agriculture  in 
practically  every  country.  Men  of  superior  qualifications  are  needed 
Need  for  to  l°°k  after  blooded  live  stock,  to  care  for  orchards  and 
intelligent  vineyards,  and  to  do  the  work  which  requires  interest, 
farm  labor  knowledge,  and  skill  on  the  part  of  the  laborer.  It  is 
becoming  increasingly  difficult  to  keep  men  of  this  type  on  the  farm 
because  of  the  constantly  increased  wages  and  greater  opportunities  of 
the  city. 

Everywhere  it  is  recognized  that  this  is  one  of  the  most  difficult 
problems  connected  with  agricultural  progress.  Under  the  best  possible 
The  drawbacks  conditions  there  are  serious  drawbacks  to  farm  labor 
to  farm  labor  which  tend  to  drive  good  men  away  from  it.  There  is 
difficulty  in  providing  employment  throughout  the  year.  It  is  impossi- 
ble to  pay  as  high  wages  as  are  now  paid  artisans  in  the  cities.  When 
to  this  is  added  social  ostracism  or  at  least  a  position  of  social  inferiority 
compared  to  city  workers  it  is  inevitable  that  the  best  American  workers 
will  leave  the  farm. 


LAND   COLONIZATION   AND   RURAL   CREDITS.  63 

On  the  other  hand,  it  is  feasible  to  create  conditions  which  will  make 
life  as  a  farm  worker  more  desirable  and  as  profitable  to  those  with 
Feasibility  of  families  as  is  the  life  of  the  unskilled  laborer  or 
satisfactory  farm  average  artisan  in  cities.  This  has  been  demonstrated 
labor  shown  by  in  Ireland,  Denmark,  Germany,  and  Australia.  It 
other  countries  has  been  accomplished  in  these  and  other  countries 
by  enabling  the  laborer  to  own  his  home.  In  Germany  these  homes 
include  from  one  acre  to  five  acres  of  land.  Such  an  area  in  the  lan- 
guage of  a  government  report,  "permits  of  the  cultivation  of  the 
wheat,  potatoes  and  vegetables  for  the  household  and  of  the  rearing 
of  a  few  pigs ;  for  milk,  goats  are  kept  and  sometimes  even  a  cow.  It 
has,  besides,  the  great  advantage  that  it  may  be  cultivated  by  the  wife 
and  children  and  does  not  prevent  the  laborer  from  working  elsewhere. 
A  larger  holding,  on  the  contrary,  might  easily  induce  him  to  neglect 
his  paid  labor." 

Thousands  of  farm  laborers'  homes  have  been  built  by  the  Home 
Colonization  Company,  of  Germany,  a  government  body.  They  cost 
on  an  average  of  about  $1,000  each.  The  laborer  gen- 
erally pays  from  10  per  cent  to  20  per  cent  of  the  pur- 
chase price  in  cash.  The  rest  is  met  by  amortized  payments.  The  cost 
of  the  land,  according  to  the  reports  of  1912,  has  averaged  $135  an  acre. 
Since  1913  a  great  many  farm  laborers'  homes  have  also  been  provided 
by  local  colonization  companies,  which  have  government  aid.  Criticism 
is  not  directed  against  the  extent  of  this  activity  but  against  the  failure 
to  move  fast  enough.  Great  difficulty  is  experienced  in  preventing  the 
inflation  of  land  prices.  To  prevent  inflation  the  government  has 
enacted  a  law  authorizing  the  compulsory  purchase  of  175,000  acres  of 
land  for  closer  settlement  by  farmers  and  laborers.  The  war.  however, 
has  interrupted  progress. 

In  Australia,  where  natural  conditions  are  like  ours,  there  are  great 
areas  of  unpeopled  land.    But  the  earlier  nomadic  and  unreliable  farm 
labor  is  happily  disappearing  in  the  areas  which  are 
being  settled  under  the  state  system  of  colonization. 
The  first  steps  in  this  reform  were  made  in  the  irrigated  settlements. 
In  these,  two-acre  homes  for  farm  laborers  are  dotted  all  over  the 
areas.     Frequently  four  homes  are  grouped  at  road  crossings.     On 
these  two-acre  allotments,  the  state  builds,  when  required,  cheap  but 
comfortable  three  or  four-room  houses  and  sells  the  land  and  houses  to 
farm  workers  who  show  evidences  of  industry,  experience,  and  charac- 
ter and  who  desire  and  expect  to  make  most  of  their  living  working  for 
wages.     Only  a  nominal  cash  payment  is  required  and  at  least  twenty 
years    time  with  a  low  rate  of  interest  is  given  in  which  to  complete 
payments. 


64  LAND   COLONIZATION   AND   RURAL    CREDITS. 

The  laborer  obtaining  a  home  under  this  plan  can  keep  a  cow,  some 
pigs,  and  poultry.  He  can  grow  his  own  vegetables  and  thus  greatly 
reduce  the  cost  of  living.  It  gives  to  his  wife  and  children  a  sense  of 
security  and  independence.  To  them  the  state  becomes  a  benefactor. 
They  love  it  for  what  it  has  done  for  them. 

No  single  feature  of  the  Australian  system  of  closer  settlement  has 
been  more  popular  or  useful  than  the  two-acre  farm  laborers'  homes 
in  the  irrigation  areas.  The  laborers  are  contented.  They  are  beautify- 
ing their  homes  and  are  meeting  their  payments.  They  provide 
reliable,  casual  help  for  neighboring  farmers  and  farmers'  wives.  The 
children  are  a  valuable  aid  in  the  rush  of  the  fruit  picking  season. 
Over  8,000  acres  have  been  absorbed  in  farm  laborers'  allotments  in 
the  closer  settlements  of  the  state  of  Victoria,  Australia ;  and  the  state 
is  being  asked  to  buy  land  to  increase  the  number.  The  farmers  who 
ask  for  this  guarantee  permanent  employment. 

In  England,  Ireland,  Denmark,  and  Italy  thousands  of  such  homes 
have  been  provided  for  farm  laborers.  Their  condition  and  their 
character  have  been  immensely  improved  by  the  independence  and  the 
security  which  come  with  owning  their  homes  and  little  patches  of 
land. 

One  regrettable  feature  of  all  American  rural  life  is  the  failure  to 
recognize  as  fully  as  is  desirable  the  importance  of  the  farm  laborer  as 
Importance  of  a  citizen  and  a  voter.  On  his  character  and  intelli- 
farm  laborer  as  gence  depends  quite  largely  the  productive  value  of 
citizen  and  voter  land;  and  in  many  sections  he  does  much  to  make 
rural  communities  socially  desirable  or  the  reverse.  We  are  giving  a 
great  deal  of  attention  to  the  efficiency  of  the  industrial  worker  and  to 
the  conditions  which  govern  his  hours  of  liberty,  his  mode  of  living, 
and  his  competency.  We  should  give  the  same  attention  to  the  farm 
laborer  in  even  a  greater  degree.  What  he  needs  is  to  have  a  definite 
and  self-respecting  position.  It  ought  to  be  possible  for  the  farm 
laborer  to  marry,  have  a  comfortable  home  for  his  family,  and  bring 
up  his  children  as  self-respecting  members  of  the  community.  This  is 
now  not  even  remotely  possible. 

The  conditions  of  the  farm  laborer,  as  disclosed  by  the  investigation 
of  the  State  Immigration  and  Housing  Commission,  are  a  menace  to 
Present  conditions  our  industrial  future  and  a  sorry  commentary  on 
of  farm  our  claim  to  economic  equality.  It  shows  that  our 

laborer  a  menace  farm  labor  is  made  up  of  a  welter  of  nationalities. 
The  list  includes  Albanians,  East  Indians,  Filipinos,  Greeks,  Span- 
iards, Slavonians,  Russians,  Mexicans,  Maltese,  Japanese,  Chinese, 
Portuguese,  Armenians,  Italians,  a  few  Scotchmen  and  Germans, 
and  here  and  there  an  American.  Of  these  60  per  cent  are  migra- 
tory and  40  per  cent  are  local,  with  jobs  averaging  from  10  to  15 


LAND    COLONIZATION   AND   RURAL    CREDITS.  65 

days  in  length.  The  hours  of  labor  are  from  10  to  16.  Too  often 
they  are  poorly  housed.  Sometimes  they  are  not  housed  at  all; 
instead,  they  may  lodge  in  the  mesquite  bush  or  the  haystack. 
There  is  a  deep-seated  prejudice  against  American  and  other 
white  farm  laborers.  The  percentage  of  Japanese  and  Hindus  is 
becoming  larger. 

The  degeneration  of  white  laborers  under  these  conditions  is  inevit- 
able. Many  of  them  become  hoboes.  They  lose  all  ambition  and  all 
regard  for  the  interests  of  their  employers.  The  sections  of  cities 
where  this  kind  of  labor  congregates  are  injuriously  affected.  As  a 
class  they  are  discontented.  With  their  continuous  tendency  towards 
disturbance  they  are  a  menace  to  political  and  social  peace. 

The  remedy  for  this  is  to  make  conditions  which  will  attract  depend- 
able white  people,  especially  Americans.  We  can  not  go  on  creating 
The  remedy  in  ^ad  conditions  of  l^6  and  seeking  people  who  are 
conditions  which  indifferent  to  those  conditions  without  destroying 
will  attract  our  rural  civilization.  When  we  read  of  the  German 

dependable  organizations  providing  little  plots  of  ground  for 

white  people  ^e  laborers,  and  building  them  comfortable  and  sani- 

tary houses  at  the  cost  of  $1,000 ;  when  we  read  of  one  Australian  state 
far  poorer  than  California  and  with  less  than  half  our  population  pro- 
viding 6,000  homes  for  laborers  and  4,000  houses  for  farmers ;  we  realize 
how  far  we  have  fallen  behind  the  rest  of  the  world  in  our  under- 
standing of  rural  needs  and  in  our  measures  to  elevate  rural  society. 


5—27025 


66  LAND    COLONIZATION    AND   RURAL    CREDITS. 


PART  IV 
METHODS  AND  POLICIES  OF  OTHER  COUNTRIES 

Since  the  beginning  of  this  century  Great  Britain,  Denmark,  Nor- 
way. Sweden,  Germany,  Russia,  Austria,  Italy,  the  six  Australian 
Oth  r  countries  states,  New  Zealand,  British  and  German  South 
have  adopted  Africa,  Brazil,  Venezuela,  and  Uruguay  have  either 
land  settlement  adopted  or  greatly  extended  a  land  settlement  policy 
policies  which  aims  to  give  settlers  homes  at  the  least  possible 

cost  and  also  to  finance  the  settler  who  is  a  good  moral  risk,  so  as  to 
enable  any  one  who  is  frugal,  industrious  and  ambitious  to  own  a  home. 
The  reasons  which  have  induced  all  these  countries  to  regard  coloni- 
zation as  a  public  matter  are  well  expressed  in  a  recent  report  of  the 
German  government. 

"Colonization  has  been  made  a  public  matter,"  says  this  report, 
''because  when  it  was  a  private  matter  persons  bought  land  without 
Reasons:  having  funds  to  pay  for  it,  only  to  make  a  profit  by 
Speculation  selling  it  again  at  the  first  opportunity.  Unprincipled 
middlemen  persuaded  owners  to  part  with  their  lands  and  other  pro- 
fessional subdividers  of  land  sometimes  unscrupulously  dismembered 
holdings  with  an  utter  disregard  for  economics;  and  the  consequence 
has  been  a  continual  increase  in  the  price  of  land." 

«*  *  *  while  every  other  part  of  the  country  exerted  itself  to  the 
utmost  to  strengthen  and  augment  its  agricultural  resources  by 
Evil  of  large  increasing  and  elevating  its  rural  population,  it  can 
landed  estates  not  be  considered  encouraging  that  in  eastern  Ger- 
many there  are  vast  territories  almost  wholly  in  the  hands  of  a  few 
landed  proprietors.  The  existence  of  such  large  landed  estates  not 
only  hinders  the  natural  progress  of  the  peasant  class,  but,  greatest 
evil  of  all,  it  is  the  principal  cause  of  the  diminished  population  of 
many  territories  because  the  working  classes,  finding  no  chances  of 
moral  or  economic  improvement,  are  driven  to  emigrate  to  the  great 
cities  and  manufacturing  districts.  Scientific  researches  also  prove 
that  small  farms  nowadays  are  more  profitable  than  large;  above  all, 
small  live  stock  improved  farms,  the  importance  of  which  for  the 
nutriment  of  the  people  is  constantly  increasing." 

In  these  widely  separated  countries  land  settlement  was  not  dealt 
with  as  a  public  matter  until  it  became  manifest  that  nonresident 
Change  necessary  ownership  and  tenant  cultivators  were  dangerous 
for  national  sources  of  social  and  political  unrest.  In  Europe 

efficiency  the  peasant  who  wanted  to  own  his  own  farm  was 

leaving  for  other  countries  where  land  was  cheap  or  the  conditions'  of 


LAND   COLONIZATION   AND   RURAL   CREDITS.  67 

purchase  favorable.  So  many  of  the  people  in  the  rural  districts  were 
leaving,  and  so  many  of  those  who  remained  were  restless  and  discon- 
tented that  some  means  of  changing  conditions  were  essential  to 
national  efficiency,  if  not  to  national  preservation. 

In  Ireland  the  purchase  of  landed  estates  and  the  subdividing  and 
selling  to  tenants  was  forced  on  the  government  as  the  only  means  of 
stopping  ruinous  emigration  and  dangerous  political  agitation.  In 
Denmark  estates  were  subdivided  to  provide  for  the  surplus  farm  popu- 
lation and  to  prevent  a  costly  exodus  to  other  countries.  In  central 
Italy  discontent  with  tenant  conditions  on  feudal  estates  had  caused 
large  areas  to  be  practically  depopulated.  Cattle  were  being  pastured 
where  land  was  formerly  intensively  cultivated.  The  result  has  been 
the  evolution  of  a  system,  which,  while  it  varies  somewhat  in  detail, 
has  certain  essential  features  common  to  all  these  countries. 

ESSENTIAL  FEATURES  OF  SYSTEMS 

Small  initial  payments.  The  first  of  these  essentials  is  a  provision 
for  enabling  farmers  to  enter  into  possession  of  land  with  only  a 
nominal  payment,  thus  leaving  the  greater  part  of  their  capital  avail- 
able to  pay  for  improvements  and  equipment. 

Organized  construction  of  farm  improvements.  The  second  is  the 
creation  of  an  organization,  either  state  or  private,  to  make  the  neces- 
sary improvements,  such  as  houses,  stables,  etc.,  leveling  and  ditching 
irrigated  land,  and  providing  practical  superintendence  over  the 
farming  operations  of  beginners  to  prevent  costly  delays  and  mistakes. 

Long-time  payments  for  land  and  improvements.  The  third  is 
making  the  period  of  payments  long  enough  to  enable  the  money  to  be 
earned  out  of  the  soil,  and  having  the  payments  amortized,  that  is,  in 
small  amounts  paid  annually  or  semiannually  rather  than  in  a  lump 
sum ;  also  securing  for  the  settler,  usually  through  the  use  of  the  state 's 
credit,  loans  of  money  needed  for  improvements  at  low  rates  of  interest. 

Practical  advice  and  supervision  for  beginners.  The  fourth  is  the 
employment  of  capable  business  men  fully  informed  regarding  prices 
of  farm  equipment  and  farming  operations  in  the  locality  to  give 
advice  to  inexperienced  beginners  or  farmers  from  other  sections  of 
the  country  who  do  not  know  what  crops  to  plant  or  when  or  how  they 
should  be  cultivated. 

This  local  director  of  a  colony  can  be  of  great  service  in  bringing 
about  cooperative  arrangements  in  buying  and  selling.  It  is  part  of 
his  duty  to  watch  the  operations  of  colonists  so  as  to  be  able  to  inform 
those  who  are  responsible  for  extending  credit  which  colonists  are 


68  LAND   COLONIZATION   AND   RURAL    CREDITS. 

industrious  and  trying  to  succeed  and  which  are  idle  and  impractical. 
Such  supervision  is  an  essential  feature  of  any  system  which  gives 
generous  personal  credit. 

This  state-aided  settlement  has  everywhere  been  remarkably  suc- 
cessful. It  was  inaugurated  to  enable  men  who  had  industry  and 
State-aided  thrift,  and  little  else,  to  become  landowners.  At  the 
settlement  outset  men  predicted  that  it  would  entail  heavy  costs  to 
everywhere  the  taxpayers.  But,  on  the  contrary,  the  conditions  of 
successful  payment  have  been  so  well  adjusted  to  the  profits  of  agri- 
culture that  in  nearly  all  countries  state-aided  settlements  have  been 
self-supporting,  and  in  some  cases  they  have  earned  a  profit.  They 
have,  moreover,  revolutionized  rural  conditions.  The  statements  of  the 
Canadian  Commission  about  the  effects  of  the  New  Zealand  system  on 
rural  life  indicate  equally  well  the  effects  of  the  systems  of  Ireland, 
Denmark,  Germany,  and  practically  all  the  other  countries  in  which 
state  aid  in  land  settlement  is  in  practice.  The  statements  of  the 
commission  follow: 

"With  money  available  on  terms  suitable  to  the  industry,  the  farm- 
ers have  built  better  houses  or  remodeled  their  old  ones;  brought  a 
large  acreage  of  land  under  cultivation  that  would  otherwise  be  lying 
idle;  have  bought  and  kept  better  live  stock;  have  bought  and  used 
more  labor-saving  machinery  on  the  farms  and  in  the  houses;  have 
erected  elevated  tanks  and  windmills ;  have  piped  water  to  their  dwell- 
ings and  to  their  outbuildings;  have  irrigation  for  their  vegetable  and 
flower  gardens  around  the  houses;  and  have  increased  their  dairy 
herds.  They  keep  more  sheep  and  pigs  and  have  so  largely  increased 
the  revenue  from  their  farms  that  they  are  able  to  meet  the  payments 
on  the  mortgages  and  to  adopt  a  higher  standard  of  living,  and  a 
better  one.  Throughout  the  country  a  higher  and  better  civilization 
is  gradually  being  evolved ;  the  young  men  and  women  who  are  growing 
up  are  happy  and  contented  to  remain  at  home  on  the  farms,  and 
find  ample  time  and  opportunity  for  recreation  and  entertainment  of 
a  kind  more  wholesome  and  elevating  than  can  be  obtained  in  the 
cities." 

It  is  impossible  for  us  to  ignore  the  importance  of  this  evolution 
and  unwise  for  us  to  disregard  the  reforms  which  have  worked  so 
Reforms  can  well  elsewhere.  Furthermore,  the  effect  of  reforms 
not  be  ignored  in  other  countries  is  already  manifest  here.  The 
number  of  desirable  immigrants  to  the  United  States  is  being  restricted. 
Settlers  are  being  attracted  from  the  United  States  to  other  countries. 


LAND  COLONIZATION  AND  RURAL  CREDITS.  69 

STATE-AIDED  LAND  SETTLEMENT  IN  OTHER  COUNTRIES 
The  following  brief  outline  will  serve  to  give  an  idea  of  the  essential 
features  of  different  state  systems: 

Ireland.  In  Ireland  9,000,000  acres  of  land  have  been  purchased  by 
the  British  Government  since  1903.  After  the  purchase  this  land  was 
Es  ntial  subdivided  into  small  farms  on  which  the  necessary 
features  of  houses  and  other  improvements  were  erected.  These 
system  in  ready-made  farms  were  then  sold,  mainly  to  former  ten- 
Ireland  ants,  at  an  average  price  of  about  $50  an  acre,  the  buyer 
to  have  sixty-eight  years  in  which  to  pay  for  the  farm  and  the  improve- 
ments, with  3£  per  cent  interest  on  deferred  payments.  The  report 
of  the  Industrial  Relations  Commission  speaks  as  follows  of  the  trans- 
formation resulting  in  Ireland  from  the  state  aid  policy : 

"For  many  generations  Ireland  was  one  of  the  most  distressed 
countries  in  the  world.  All  of  its  evils  were  due  primarily  to  absentee 
landlords  and  farm  tenants.  But  within  the  last  decade  a  wonderful 
change  has  taken  place  in  the  social  and  economic  condition  of  the 
Irish  peasant,  brought  about  by  the  enactment  by  parliament  of  what 
has  since  become  known  as  the  Irish  land  bill.  This  act  created  a 
royal  commission,  with  power  to  appraise  the  large  Irish  land  estates 
owned  by  absentee  landlords,  at  their  real  and  not  at  their  speculative 
value,  to  buy  them  in  the  name  of  the  government  at  the  appraised 
value,  plus  12  per  cent  bonus,  to  cut  them  up  into  small  parcels,  to 
sell  them  to  worthy  farm  tenants,  giving  some  seventy  years  time  in 
which  to  make  small  annual  payments  on  the  amortization  plan,  the 
deferred  payments  bearing  but  3  per  cent  interest.  In  addition  to 
this,  the  government  made  personal  loans  to  peasants  sufficient  to  cover 
the  cost  of  stock  and  farm  implements,  also  payable  in  small  annual 
installments  bearing  a  minimum  rate  of  interest.  The  government 
further  furnished  the  various  farm  districts  with  farm  advisers, 
trained  graduates  from  agricultural  colleges,  who  act  as  friend,  adviser, 
and  scientific  farm  instructor  to  the  peasants.  Within  a  decade  the 
wretched  and  more  or  less  lawbreaking  farm  tenant  has  been  con- 
verted into  an  industrious,  progressive  and  law-abiding  landed  proprie- 
tor ;  in  fact,  he  has  become  so  law-abiding  that  many  jails  in  the  farming 
districts,  formerly  filled  with  agrarian  criminals,  have  been  converted 
into  public  schools." 


70  LAND   COLONIZATION   AND   RURAL   CREDITS. 

England  and  Scotland.  Just  prior  to  the  outbreak  of  the  present 
war,  the  government  of  Great  Britain  had  agreed  to  provide  a  land 
Essential  settlement  policy  for  Scotland  similar  to  that  now  oper- 
features  of  ating  in  Ireland.  Since  the  war  began  a  parliamentary 
systems  in  commission  has  been  studying  the  subject  in  England 
England  and  wjth  a  view  to  providing,  by  public  purchase  and  subdi- 
vision, farm  lands  for  returning  soldiers,  these  lands  to 
be  sold  to  soldiers  on  long-time  terms  with  amortized  payments  and 
with  low  rates  of  interest. 

Already  much  has  been  done  in  England  to  provide  farms  for  ten- 
ants under  the  Small  Holdings  Act  passed  in  1908.  Under  this  act 
estates  are  being  purchased  by  the  county  councils,  subdivided  into 
small  farms,  and  sold  or  rented  to  poor  people.  These  farms  are  first 
improved  by  the  erection  of  houses  and  other  farm  conveniences  and 
then  sold  at  a  slight  increase  on  the  purchase  price. 

Settlers  are  given  from  thirty  to  fifty  years  time  with  interest  on 
deferred  payments  at  4  per  cent. 

The  significant  fact  is  the  price  at  which  the  government  buys  this 
land.  In  England  the  average  price  has  been  $160  an  acre ;  in  Wales 
$105  an  acre.  For  $150  an  acre  highly  improved  farms  are  being 
bought  privately  within  thirty  miles  of  the  great  retail  markets  of 
London. 

Denmark.  In  1899  the  Danish  Government,  to  prevent  further  and 
ruinous  emigration,  began  buying  and  subdividing  large  estates  and 
Essential  selling  them  to  those  of  its  people  who  had  the  necessary 
features  of  evidences  of  character  and  farming  experience  and  who 
system  in  were  able  to  pay  one-tenth  the  cost  of  the  land  and 
Denmark  improvements.  The  government,  according  to  the  last 
statistics  available,  has  bought  this  land  at  an  average  price  of  $71.65 
an  acre.  The  settler  is  given  from  fifty  to  seventy-five  years  in  which 
to  repay  this  price,  with  an  interest  rate  of  from  3  to  4  per  cent ;  and 
in  some  instances  there  is  to  be  no  payment  of  interest  for  the  first 
five  years. 

In  recent  years  there  has  been  much  private  subdivision,  carried  on 
under  public  supervision.  Associations  formed  for  this  purpose  buy 
large  farms  and  then  subdivide  and  sell  them  to  settlers  at  prices 
approved  by  the  government,  which  guarantees  loans  made  by  land 
banks  to  assist  buyers  to  complete  their  payments.  The  average  pur- 
chase price  of  land  so  bought  on  the  islands  was  $102.04  and  on  the 
mainland  $61.15  an  acre. 


LAND   COLONIZATION   AND   RURAL   CREDITS.  71 

Germany.  Beginning  in  1886,  the  German  Government  entered  on 
a  state  system  of  colonization  which  today  represents  one  of  the  greatest 
Essential  agrarian  reforms  of  that  empire.  It  was  inaugurated 
features  of  in  the  face  of  bitter  opposition  from  the  large  land- 
system  in  holders.  They  saw  their  political  prestige  menaced  by  a 
Germany  movement  that  was  to  change  a  society  having  a  landed 
aristocracy  at  one  end  of  the  scale  and  a  poverty-stricken,  discontented 
peasantry  at  the  other  into  a  society  made  up  principally  of  a  middle 
class. 

Land  settlement  in  Germany  is  now  being  carried  on  by  two  different 
authorities.  The  first  is  the  Home  Colonization  Commission  created  to 
increase  the  number  of  German  farmers  in  east  Prussia  and  Poland. 
The  other  is  a  combination  of  state  and  local  authorities  which  pro- 
motes and  manages  land  subdivision  and  settlement  in  all  parts  of  the 
empire.  The  local  members  of  these  associations  usually  include 
representatives  of  the  local  government  and  of  the  rural  credit  banks. 
One-half  of  the  funds  for  these  associations  is  contributed  by  the  state 
and  the  other  half  by  the  local  authorities.  For  the  first  of  these 
organizations  the  government  has  provided  $214,000,000,  the  greater 
part  since  1909.  With  it  the  Home  Colonization  Commission  has 
bought  and  subdivided  lands  and  financed  settlers  on  more  than  a 
million  acres  in  five  provinces  of  the  empire. 

Colonization  under  a  combination  of  local  and  state  authorities  is 
a  recent  development,  the  law  concerning  it  having  been  passed  in 
1911  and  amended  in  1913.  A  great  deal  has  been  done,  however, 
especially  in  providing  homes  for  farm  laborers. 

At  first  the  tendency  was  to  buy  land  remote  from  markets  and  not 
cultivated  to  the  best  advantage.  But  since  1909  the  demand  for 
farms  and  the  benefits  derived  from  them  has  led  to  the  buying  of 
highly-improved  estates.  The  tendency  now  seems  to  be  to  continue 
this  until  tenant  farming  in  Germany  is  practically  abolished,  and 
also  until  all  the  estates  of  any  considerable  size  have  been  subdivided. 

When  the  Home  Colonization  Commission  purchases  an  estate  it 
keeps  it  two  years  before  offering  it  to  settlers.  That  time  is  used  to 
carry  out  the  improvements  which  can  best  be  made  before  settlement. 
These  include  macadamized  roads,  drainage  works,  the  manuring  and 
the  seeding  of  farms,  and  in  some  cases  systems  of  irrigation.  The 
land  is  cultivated  in  order  to  bring  it  into  a  condition  in  which  it  will 
be  profitable  to  the  settler.  The  subdivisions  include  farms  varying 
in  size  from  twelve  to  sixty-five  acres  and  homes  for  farm  laborers 
varying  in  area  from  one  and  a  half  to  five  acres.  If  estates  have 
large  groups  of  buildings,  these  are  made  a  sort  of  civic  centers  where 
are  found  blacksmith  shops,  stores,  schools,  and  churches. 


72  LAND   COLONIZATION   AND   RURAL    CREDITS. 

Settlers  are  given  the  services  of  expert  advisers.  Seed  for  the  first 
year  is  furnished  and  where  it  is  desired  houses  are  built.  These 
houses  cost  from  $300  to  $1,000.  The  settler  is  expected  to  have  money 
enough  to  pay  for  house,  seed,  and  equipment,  but  if  he  lacks  this 
and  is  satisfactory  in  other  respects  aid  in  securing  these  is  supplied. 
The  average  expenditure  for  seed,  tools,  and  improvements,  aside  from 
the  house,  is  about  $500  for  each  farm. 

At  first  these  farms  were  leased  to  settlers.  This  was  not  a  success. 
Then  settlers  were  allowed  to  buy  them  outright,  or  to  pay  for  them  as 
soon  as  possible.  This  also  was  unsatisfactory,  because  many  of  the 
settlers  were  disposed  to  speculate  and  sell  out  whenever  a  profit  could 
be  secured.  Under  the  present  system  the  settler  is  not  required  to 
make  any  cash  payment  on  the  land  but  has  it  for  fifty  years  with  an 
annual  payment  of  3^  per  cent  interest  on  the  total  cost.  He  must  also 
meet  the  requirements  of  the  state  regarding  cultivation  and  keeping 
up  improvements,  which  are  closely  looked  after.  At  the  end  of  this 
fifty-year  period  the  payments  on  the  land  begin.  The  average  cost 
of  land  bought  and  subdivided  by  the  Home  Colonization  Commission 
has  been  about  $95  an  acre.  The  average  cost  under  the  local  boards, 
as  far  as  ascertained,  has  been  about  $110  an  acre. 

Italy.  The  commission  has  been  unable  to  get  the  latest  reports  on 
the  land  settlement  operations  of  the  Italian  Government  or  of  the  sev- 
..  .  .  eral  associations,  operating  under  government  direction, 

which  carry  on  this  business  on  a  nonprofit  seeking  basis. 
However,  such  valuable  results  have  been  obtained  from  state  loans  for 
making  farm  improvements,  and  carrying  out  irrigation  and  drainage 
plans  that  such  loans  have  now  become  a  permanent  state  policy.  The 
state  loan  is  made  for  a  period  of  seventy-five  years  with  interest  at 
2£  per  cent. 

Russia.  In  no  other  country  has  systematic  state  colonization 
reached  the  magnitude  that  it  has  attained  in  recent  years  in  Russia. 
Between  1906  and  1910  the  Peasants'  Land  Bank,  which 
has  an  annual  government  subsidy  of  $2,575,000,  bought, 
subdivided  and  sold  to  settlers  4,041,789  acres  for  $92,700,000,  or  about 
$23  an  acre.  The  maximum  size  of  these  farms  is  fifty-seven  acres. 
Loans  are  made  up  to  90  per  cent  of  the  value  of  the  land  with  interest 
at  4  per  cent  and  a  payment  period  varying  from  thirteen  to  fifty-five 
years.  This  is  in  addition  to  the  immense  colonization  operations  of  the 
government  in  Siberia  where,  as  stated  in  Herrick's  work  on  rural 
credits,  "Hundreds  upon  hundreds  of  thousands  of  Russian  farmers 
have  acquired  millions  of  acres,  worth  billions  of  dollars,  by  means  of 
money  and  credit  facilities  supplied  by  the  government."  It  is 
reported  that  Russia  is  now  making  preparations  to  inaugurate,  at 


LAND    COLONIZATION   AND   RURAL   CREDITS.  73 

the  close  of  the  present  war,  the  most  liberal  and  comprehensive  system 
of  state  aid  in  land  settlement  yet  undertaken  by  any  country. 

New  Zealand.  The  reasons  for  colonization  in  New  Zealand  are  not 
unlike  those  in  California.  A  country  of  66,000,000  acres,  about  two- 
thirds  the  area  of  California,  has  a  population  of  a 
and  little  over  1,000,000,  or  about  one-third  that  of  this 
state.  In  order  to  bring  about  a  more  rapid  development  of  the  unoccu- 
pied land,  New  Zealand  adopted  a  system  of  issuing  bonds  for  long 
periods  of  years,  selling  these  bonds  in  London,  and  lending  the  money 
to  farmers  for  the  purpose  of  buying  land  and  making  improvements 
on  it.  In  the  eight  years  from  1906  to  1914,  the  government  loaned 
$72,726,800.  The  loans  are  made  at  4r|  per  cent  interest  for  terms  of 
payment  varying  from  twenty  to  thirty-six  years.  Up  to  60  per  cent 
of  the  value  of  the  property  may  be  borrowed  if  the  settler  can  give 
first  mortgage  security,  or  60  per  cent  of  his  equity  in  the  property  if 
it  is  a  leasehold. 

There  are  wide  variations  in  land  prices  in  New  Zealand,  due  to 
differences  in  location  and  improvements.  Generally  speaking,  how- 
ever, land  prices  in  New  Zealand  are  high,  relatively  much  higher 
than  in  Europe. 

The  Australian  States.  The  most  fruitful  field  for  study  of  land 
settlement  operations  is,  however,  the  six  Australian  states.  Especially 
is  this  true  with  respect  to  California,  as  the  southern  half 
of  the  continent  has  climate,  products,  and  market  condi- 
tions very  similar  to  ours.  The  resemblance  goes  farther.  The  two 
countries  are  peopled  by  the  same  race,  and  they  have  the  same  habits, 
the  same  social  and  political  ideals,  and  very  similar  economic  conditions. 

In  the  two  most  highly  developed  states  of  Australia,  Victoria  and 
New  South  Wales,  there  is  another  resemblance.  There,  as  in  Cali- 
fornia, the  early  land  policies  were  unwise  and  profligate.  Land  was 
given  away  without  regard  to  the  needs  and  the  rights  of  future  genera- 
tions. Great  landed  estates  were  created  until,  as  pastoral  pursuits 
gave  way  to  cultivation,  and  especially  to  intensive  cultivation,  there 
developed  an  agriculture  in  which  nonresident  ownership  and  tenant 
farming  were  the  dominating  features.  This  was  not  regarded  as 
desirable.  It  led  to  the  inauguration  of  the  present  system  of  closer 
settlement. 

The  plan  of  this  system  was  to  incorporate  the  following  ideas: 

1.  Have  the  area  of  land  large  enough  to  give  a  living  income  for  a 
settler  and  family. 

2.  Estimate  in  advance  the  capital  needed  to  improve  and  equip  that 
area  and  fix  the  proportion  to  be  supplied  by  the  settler  and  terms  of 
borrowing  the  remainder. 


74  LAND    COLONIZATION    AND   RURAL   CREDITS. 

3.  Provide  organized  direction  in  the  improvement  of  farms  in  order 
that  the  settler  may  earn  a  living  in  the  least  time  and  with  the  least 
expense. 

The  systems  now  in  operation  in  Victoria  and  New  South  Wales  are 
alike  in  essential  features,  the  only  difference  between  them  being  the 
nature  of  the  land  title.  In  New  South  Wales  the  settler  acquires 
only  a  perpetual  lease,  while  in  Victoria  he  acquires  a  freehold  title. 
But  in  Victoria  the  title  to  the  land  does  not  pass  to  the  settler  for 
twelve  years  and  can  then  only  be  acquired  or  held  by  an  actual  resi- 
dent. This  prevents  speculators  from  acquiring  land. 

As  the  working  details  of  the  system  in  operation  in  these  states  are 
likely  to  receive  increasing  attention  here,  those  of  Victoria  are  given 
in  full. 

GENERAL  CONDITIONS  GOVERNING  THE  SALE  OF  CLOSER  SETTLEMENT 
LANDS  IN  VICTORIA,  AUSTRALIA 

1.  "Applicants,  male  or  female,  must  be  over  the  age  of  eighteen 

years. 

2.  "The  maximum  value  of  land  which  may  be  held  by  one  lessee 

is  $12,000,  except  in  the  case  of  an  allotment  where  a  valuable 
homestead  is  erected,  when  the  value  of  the  land  may  be 
increased  to  $19,200. 

Agricultural  Laborers'  Allotment  to  $1,680. 

3.  "Allotments  are  sold  under  a  conditional  purchase  lease  having 

a  term  of  31£  years.  Applicants  are  required  to  lodge  a 
deposit  equal  to  3  per  cent  of  the  capital  value  of  the  land 
applied  for,  together  with  $6.00  lease  and  registration  fees. 
In  the  event  of  an  application  being  unsuccessful,  all  money 
lodged,  less  the  registration  fee  of  $1.20,  is  returned. 

4.  "Residence  upon  the  allotment,  or  upon  the  estate  of  which  the 

allotment  forms  a  part,  or  upon  land  adjoining  the  estate  and 
not  separated  from  it  by  more  than  a  road  or  watercourse,  is 
compulsory  for  eight  months  in  each  year,  in  the  case  of  a 
farm  holding.  In  the  cases  of  agricultural  laborer's  and 
workmen's  allotments,  residence  for  eight  months  in  each 
year  is  also  compulsory,  and  each  lessee  by  himself  or  his 
family  must  reside  on  his  own  allotment. 

5.  "Upon  a  farm  allotment  it  is  a  condition  of  the  lease  that 

permanent  and  substantial  improvements  to  an  amount  equiv- 
alent to  6  per  cent  of  the  capital  value  of  the  land  shall  be 
effected  by  lessee  before  the  end  of  the  first  year.  Before  the 
end  of  the  third  year,  the  value  of  the  improvements  must  be 
increased  to  10  per  cent,  and  by  the  end  of  the  sixth  year  to  a 
total  value  of  20  per  cent  of  the  capital  value  of  the  land. 
Upon  an  agricultural  laborer's  allotment  a  substantial  dwell- 
ing to  the  value  at  least  of  $144  must  be  erected  by  the  end 
of  the  first  year,  and  the  boundaries  of  the  allotment  must  be 
securely  fenced  by  the  end  of  the  second  year. 


LAND   COLONIZATION   AND   RURAL   CREDITS.  75 

6.  "The  Crown  grant  (freehold  title)  may  be  obtained  at  the  end 

of  any  half-year  after  the  first  twelve  years  of  the  lease  have 
expired  on  payment  of  the  balance  of  the  purchase  money. 
Perpetual  residence  by  the  lessee  or  occupier  for  the  time 
being  is  required  under  the  Crown  grant. 

7.  "The    Closer    Settlement    Acts    provide    that    where    through 

unforeseen  circumstances  settlers  can  not  meet  installments 
punctually,  they  may  obtain  temporary  suspension  thereof  up 
to  60  per  cent  of  the  security  value  of  the  permanent  and  sub- 
stantial improvements  effected  by  them,  or  an  advance  up  to 
the  same  amount,  provided  the  installments  are  paid  to  date, 
may  be  obtained  for  a  fixed  period  in  order  to  enable  them  to 
continue  working  and  further  improve  their  allotments.  All 
advances  or  suspensions  carry  an  interest  charge  of  5  per  cent 
per  annum  upon  the  amount  suspended  or  advanced.  In  cases 
where  the  amount  of  arrears  exceeds  the  security  value  of  the 
improvements,  the  settler  is  required  to  give  a  lien  on  his  crop 
or  a  stock  mortgage  as  further  security  until  the  arrears  are 
extinguished  or  reduced  to  within  the  security  value  of  the 
improvements.  The  maximum  advance  or  suspension  which 
may  be  made  to  a  settler  on  a  farm  allotment  on  account  of 
improvements  effected  within  the  first  six  years  of  his  lease  is 
$2,400.  If  the  lease  has  been  in  existence  over  six  years,  and 
the  certificates  of  compliance  with  the  conditions  of  the  lease 
have  been  obtained,  the  board  may  increase  the  advance  by  an 
amount  up  to  60  per  cent  of  the  principal  which  has  been 
repaid,  the  total  advance  not  to  exceed  $4,000." 

PREPARATION  OF  LAND  FOR  IRRIGATION 

"The  state  renders  the  following  assistance  to  settlers  in  the  grading 
of  land: 

1.  It  rents  settlers  grading  tools  at  the  nominal  charge  of  60  cents 

a  day,  thus  saving  the  settler  a  large  expenditure  in  these 
implements. 

2.  It  furnishes  at  a  nominal  cost  contour  plans  showing  the  direc- 

tion of  the  slopes,  thus  enabling  the  settler  to  tell  how  his 
land  should  .be  graded. 

3.  It  grades  a  part  or  the  entire  farm  in  advance  of  settlement,  and 

adds  the  cost  of  this  to  the  price  of  the  land." 

The  settler,  therefore,  has  the  option  of  either  doing  his  own  work 
or  of  taking  a  block  where  a  part  of  the  work  has  already  been  done. 

Closer  Settlement  in  Victoria.  Under  this  act  there  have  been  pur- 
chased in  Victoria  567,687  acres  of  land,  the  purchase  price  being  about 
$37  an  acre.  About  15  per  cent  of  the  purchase  price  was  necessary  to 
cover  expenses  of  supervision  and  settlement.  The  average  price  to 
settlers  of  the  Closer  Settlement  lands  has  been  about  $45  an  acre. 
The  land  so  bought  has  been  disposed  of  as  follows:  500,819  acres  in 


76  LAND    COLONIZATION   AND   RURAL    CREDITS. 

farm  allotments,  8,829  acres  as  agricultural  laborers'  allotments; 
4,112  settlers  have  secured  farms  under  this  state  act. 

Closer  Settlement  in  the  Commonwealth.  Between  1901  and  1914 
the  six  Australian  states  purchased  and  subdivided  3,056,957  acres,  for 
which  $55,243,125  were  paid,  or  about  $18  an  acre.  In  all  of  the  states 
provisions  are  made  to  assist  settlers  to  build  homes  and  effect  improve- 
ments needed  to  bring  the  land  fully  and  promptly  under  cultivation. 
In  the  five-year  period  from  1909  to  1914  these  six  states  loaned  to 
farmers  to  make  improvements  and  buy  equipment  $68,029,500.  This 
has  been  done  without  any  cost  to  the  general  taxpayer,  as  the  interest 
paid  by  the  farmers  was  greater  than  the  interest  paid  by  the  state; 
and  the  farmers  have  met  both  payments  of  principal  and  interest,  so 
that  there  has  been  an  accumulated  profit  of  $1,233,370. 

Brazil.     In  Brazil  the  federal  government  cooperates  with  the  state 

governments,  with  the  transportation  companies,  and  with  individuals  in 

giving  aid  to  settlers.    The  state  government,  with  which 

the  federal  government  has  arrangements,  will  provide 

colonists  with  tools  and  seed.    The  farms,  when  near  railroads,  do  not 

exceed  62  acres.    If  they  are  distant  from  transportation,  they  may  be 

125  acres  in  extent. 

The  government  will,  when  requested,  build  good  and  sanitary 
houses,  but  immigrants  who  desire  to  erect  houses  at  their  own  expense 
and  to  their  own  taste  can  do  so.  Improved  farms  will  be  sold  either 
for  cash  or  payments  in  installments.  Where  cash  is  paid  a  definite 
title  is  given  immediately ;  where  payments  are  amortized,  title  is  given 
when  payments  have  been  completed.  Those  who  purchase  farms  on 
the  installment  plan  may  pay  off  any  part  of  the  debt  before  the  final 
date,  and  if  this  is  done  a  rebate  of  12  per  cent  is  given  on  the  install- 
ments paid  in  advance. 

For  the  first  six  months  after  their  arrival,  or  until  they  harvest  and 
sell  their  first  crop,  colonists  coming  from  other  countries  may  when 
necessary  obtain  loans  to  purchase  food  for  their  families  and  for  the 
first  year  they  receive  medical  attendance  and  medicine  free  of  charge. 
The  land,  the  improvements,  and  such  aid  as  is  not  given  free  of  charge 
are  all  lumped  together  in  the  debt  for  the  land.  The  amortized  pay- 
ments for  the  land  begin  not  later  than  the  end  of  the  second  year,  and 
the  period  for  completing  payments  is  five  years  when  the  lands  are 
near  railroads,  and  eight  years  when  distant  from  them. 

In  the  state  of  San  Paulo  the  price  of  land  varies  from  $.60  to  $4.50 
an  acre  and  the  annual  payments  vary  from  $30  to  $90.  In  1914,  the 
year  after  state  aid  began,  there  were  1,600  applications  for  homesteads 
from  the  city  of  San  Francisco.  Settlement  has  been  interrupted  by 
the  war.  but  it  is  expected  to  be  active  when  the  war  ceases. 


LAND    COLONIZATION    AND   RURAL    CREDITS.  77 

Venezuela.  The  colonization  act  of  Venezuela  was  passed  in  1912. 
Immigrants  acceptable  under  this  act  are  individuals  of  the  European 

V  race'  Persons  under  sixty  years  of  age  having  good  habits 

and  health  and  good  moral  character.  The  government 
officials  are  authorized  to  enter  into  arrangements  with  colonists  to  pay 
their  expenses  to  the  country  and  to  see  that  they  are  sent  free  of  cost  to 
their  farms.  To  the  first  hundred  families  who  come  under  this  act  in 
each  section  of  the  country  there  are  alloted  62  acres  and  25  acres  addi- 
tional for  each  son  over  ten  years  of  age.  After  the  first  one  hundred 
families  the  rest  of  the  land  will  be  sold  to  colonists  for  eight  cents  an 
acre,  payable  in  ten  annual  installments,  the  first  payment  to  begin  at  the 
end  of  the  first  year.  The  first  one  hundred  families  are  given  houses 
without  rent  for  one  year,  tools,  animals  for  cultivation,  all  the  seed  and 
live  stock  and  food  needed  for  six  months  in  the  hot  parts  of  the  country 
and  for  a  year  in  the  cold  parts,  and  all  necessary  material  for  the 
construction  of  a  house. 

All  of  the  things  so  supplied  to  the  settler  must  be  repaid  to  the 
government  in  five  annual  payments,  which  must  be  begun  at  the  end 
of  the  third  year,  making  the  time  of  payment  eight  years.  The  govern- 
ment supplies  food  and  lodging  for  the  colonists  from  the  time  they 
arrive  in  the  country  until  they  are  located  on  their  farms. 

Uruguay.  A  bill  for  the  promotion  of  land  settlement  in  Uruguay 
is  now  before  the  legislature  of  that  country.  It  has  the  support  of  the 
government,  and  it  is  believed  it  will  pass.  It  appropriates 
$500,000  to  be  used  in  purchasing  and  subdividing  land. 
To  furnish  this  money  bonds  are  to  be  sold  drawing  interest  at  5  per 
cent.  The  homesteads  will  be  sold  for  cash  or  in  installments  covering  a 
period  of  thirty  years.  The  price  of  these  subdivisions  is  fixed  to 
cover  the  cost  of  land  and  expenses  of  building  roadways,  etc.,  so  that 
returns  from  the  land  will  reimburse  the  state  for  the  expense  incurred. 
The  $500,000  is  intended  to  be  a  revolving  fund,  and  as  settlers  pay  for 
their  land  new  land  is  to  be  bought. 

No  settler  can  buy  more  than  one  farm,  but  the  size  of  these  farms  is 
not  fixed  in  the  act,  that  being  left  to  the  discretion  of  the  government 
commission,  which  includes  the  president  and  the  secretary  of  Industry 
and  Labor.  The  farms  are  to  be  free  of  taxes  for  ten  years  and  exempt 
from  judgment  during  the  first  year  of  possession. 

FEATURES  OF  DEVELOPMENT  WHICH  REQUIRE  ATTENTION 
No  other  part  of  America  can  provide  so  attractive  rural  life  as  the 
Rural  home         coast  and  foothill  sections  of  California.    The  owner  of 
colonies  a  few  acres  can  live  out  of  doors,  can  have  green  lawns, 

flowers,  fruits,  and  vegetables  of  his  own  growing  throughout  the  entire 
year. 


78  LAND   COLONIZATION   AND   RURAL   CREDITS. 

To  the  charm  and  the  healthfulness  of  this  kind  of  home  life  there 
is  added  an  environment  that  is  altogether  unique  in  its  opportunities 
The  opportunities  and  attractions.  The  foothills  and  the  valleys  are 
and  attractions  the  places  for  homes.  The  mountains  and  sea  are 
of  rural  homes  close  at  hand  for  occasional  visits.  Rural  home 
colonies  of  educated,  refined  people  who  love  outdoor  life  are  a  natural 
sequence  of  our  system  of  good  roads,  good  schools,  and  the  literary 
and  artistic  life  of  our  cities.  Home  colonies  ought  to  be  laid  out  by 
the  best  landscape  engineers;  and  their  locations  and  their  advantages 
should  be  made  widely  known.  Much  has  been  done  in  home  coloniza- 
tion in  southern  California.  But  the  greatest  fields  for  expansion  are 
in  the  beautiful  coast  hills  and  valleys  of  northern  and  central  Cali- 
fornia and  along  the  foothill  slopes  of  the  Sierras.  Marin,  Sonoma, 
San  Mateo,  Santa  Clara  and  Monterey  counties  ought  to  rival  southern 
France  in  the  number  and  the  attractiveness  of  their  rural  homes  and 
gardens. 

It  must  be  made  clear,  however,  that  such  homes  afford  not  an 
opportunity  to  make  money,  but  an  opportunity  for  those  who  have 
money  to  get  the  most  out  of  life.  The  aim  should  be  to  create  the 
best  conditions  of  life  for  those  who  have  an  assured  income,  although 
it  need  not  be  a  large  one.  Thousands  of  people  in  the  East  and  the 
Middle  West  having  no  business  ties  could  live  in  California  as  con- 
veniently as  elsewhere,  and  could  get  infinitely  more  out  of  life  here 
than  is  possible  in  sections  of  the  country  where  a  rigorous  climate 
restricts  the  freedom  of  outdoor  life. 

Colonies  for  such  persons  would  bring  about  one  thing  that  is 
desirable  in  this  state :  a  clear-cut  distinction  in  colonization  enterprises 
Distinction  between  residence  values  and  productive  values, 

between  residence  The  literature  of  several  colonies  indicates  that 
value  and  social  advantages  and  the  residence  value  of  homes 

productive  value  are  important  features  of  their  plans;  but  unfortu- 
nately this  fact  is  not  made  clear  in  the  hopes  held  out  to  settlers. 
An  unfortunate  example  of  this  kind  of  colonization  is  the  Little 
Landers  colonies  in  which  prospects  were  held  out  of  an  attractive 
social  life  based  on  the  income  which  could  be  derived  from  a  single 
acre  of  land.  Many  oversanguine,  inexperienced  settlers  left  perma- 
nent employment  to  take  up  residence  in  these  colonies,  believing  that 
the  new  life  would  be  independent  and  easy.  They  found,  on  the 
contrary,  that  the  income  was  meager  and  the  work  hard.  Disillusion- 
ment and  discontent  followed.  These  colonies  would  have  been  a 
success  if  only  colonists  having  an  outside  income  of  at  least  $500 
a  year  had  been  accepted.  With  food  and  clothes  assured,  all  the  other 
anticipations  would  have  been  realized. 


LAND   COLONIZATION   AND   RURAL    CREDITS.  79 

In  schemes  of  this  character  where  the  capital  of  settlers  is  limited 
the  difference  between  the  price  at  which  land  is  sold  before  subdivision 
Need  for  lessening  and  that  at  which  it  is  sold  to  settlers  should  be 
overhead  cost  in  small.  In  the  Little  Landers  colonies,  on  the  con- 
rural  home  colonies  trary,  the  difference  between  the  two  prices  was 
very  great.  What  is  needed  is  some  plan  for  colonies  of  this  character 
which  will  lessen  the  overhead  cost. 

There  is  also  need  of  a  more  clear-cut  distinction  between  residence 
and  income  values.  Too  often  these  are  hopelessly  confused.  The 
Atascadero  Colony  is  an  illustration  of  this.  Here  land  which  cost 
less  than  $40  an  acre  is  being  sold  to  settlers  in  from  one  to  ten  acre 
tracts  at  from  $250  to  $1,000  an  acre.  These  prices  are  believed  to 
be  higher  than  productive  values  warrant.  However,  the  company  is 
expending  large  sums  of  money  in  the  building  of  roads,  creating  a 
civic  center,  planting  and  cultivating  orchards  for  two  years  and  these 
are  desirable  features  for  those  who  are  able  to  pay  for  them.  But 
the  advertisements  should  make  this  clear  and  should  not  exaggerate 
the  income  or  profits  to  be  derived  from  cultivation  in  an  attempt  to 
make  this  alone  justify  the  prices  asked. 

While  it  is  not  believed  that  excessive  prices  should  be  charged  for 
land  in  residence  colonies,  the  evils  of  inflated  prices  are  not  so  great 
Evils  of  inflated  there  as  in  the  colonies  for  people  of  limited  means 
prices  greater  in  who  expect  to  earn  their  living  out  of  the  soil, 
productive  colonies  jn  such  colonies  any  marked  difference  between 
the  productive  value  of  the  land  and  the  price  at  which  it  is  sold  con- 
stitutes an  economic  wrong  because  it  deprives  settlers  of  a  fair  interest 
on  their  investment. 

The  commission  and  the  state  are  indebted  to  Professor  R.  L.  Adams 
of  the  University  of  California  and  Professor  M.  S.  Wildman  of 
Stanford  for  their  investigation  of  this  subject,  which  was  made 
without  charge  for  services,  at  the  request  of  the  State  Commission 
of  Immigration  and  Housing  and  the  Colonization  Commission. 

NEED  FOR  A  DETERMINATION  OF  WHAT  Is  A  LIVING  AREA 
One  of  the  needs  of  colonization  in  this  state  is  a  comprehensive 
investigation  of  the  returns  from  farms,  vineyards,  and  orchards;  of 
the  expenses  of  cultivation  and  the  cost  of  supporting  a  family,  so 
that  approximate  guides  can  be  furnished  as  to  the  acreage  of  land 
required  for  a  living  area  under  different  kinds  of  cultivation.  Sub- 
divisions of  land  unfit  for  market  gardening  and  remote  from  cities 
into  one-acre,  five-acre  and  ten-acre  tracts  have  been  sold  as  living 
areas.  As  stated  in  the  testimony  of  Judge  Chipman  and  others,  they 
have  been  sold  to  laborers  and  clerks  in  cities  who  believed  that'  they 
were  making  provision  for  their  old  age.  Washerwomen,  clerks, 


80  LAND    COLONIZATION    AND   RURAL    CREDITS. 

artisans,  and  school-teachers  are  struggling  to  pay  for  these  little 
patches  of  laud  which  often  are  so  located  that  they  could  not  be  made 
to  provide  a  living  income.  Because  of  this  they  have  an  uncertain 
selling  value. 

The  widely-advertised  statement  that  in  California  a  comfortable 
living  can  be  made  for  a  family  from  an  acre  of  land  shows  ignorance 
Misleading  °^  agricultural  possibilities  or  an  inexcusable  disre- 

statements  of  gard  of  agricultural  facts.  The  density  of  population 
what  is  a  which  a  family  to  an  acre  would  create  has  never 

living  area  been  achieved  elsewhere.  Irrigated  Egypt,  where 

living  expenses  have  been  reduced  to  the  lowest  limit,  where  the  land 
is  unsurpassed  in  fertility,  and  where  it  is  tilled  by  the  most  indus- 
trious people  in  the  world,  does  not  support  a  family  to  the  acre.  It 
is,  therefore,  not  to  be  expected  that  unskilled  men  on  land  not  espe- 
cially fertile  can  work  this  miracle  in  California. 

There  is  enough  land  in  California  unused  and  uncultivated  to 
render  it  unnecessary  to  crowd  people  in  this  fashion.  This  state  needs 
Need  for  plans  plans  which  Avill  provide  a  more  generous  social  life 
for  scientific  and  the  kind  of  agriculture  and  horticulture  which 
development  wjn  gjve  the  largest  returns  for  the  worker's  labor. 
And  we  need  also  the  help  which  patient  scientific  study  can  give  us 
in  planning  this  kind  of  development. 

How  TO  ENCOURAGE  YOUNG  PEOPLE  TO  BECOME  FARMERS 
One  of  the  problems  of   California,   as  of  the  world,   is  to  keep 
intelligent,  progressive  young  people  on  the  farm.     In  recent  years 
Young  people      tne  industries  of  the  city  have  offered  so  many  oppor- 
tempted  to  tunities  for  industrious  and  enterprising  young  people 

withdraw  from  that  there  is  a  strong  temptation  for  the  young  men 
rural  life  an(j  women  trained  in  our  agricultural  colleges  and 

high  schools  to  accept  salaried  positions  and  thus  be  drawn  away  from 
rural  life. 

The  rising  price  of  land  increases  this  tendency  because  only  those 
who  have  accumulated  considerable  money  can  attempt  to  purchase 
Farms  can  be  farms,  especially  under  the  terms  on  which  land 

bought  only  by  is  usually  sold.     This   forces   farmers'   sons  and 

those  who  have  daughters,  who  have  a  real  love  for  farm  life,  to 

accumulated  money  work  for  wages>  an(j  for  this  there  are  far  better 
opportunities  in  the  cities.  The  statistics  gathered  in  this  investigation 
show  that  the  majority  of  settlers  now  buying  farms  in  California  are 
middle-aged  men  who  have  accumulated  money  elsewhere  or  in  other 
occupations. 


LAND    COLONIZATION   AND   RURAL    CREDITS.  81 

If,  however,  young  people  were  given  an  opportunity  to  begin  life 
on  a  farm  of  their  own,  so  that  they  could  feel  that  their  future  was 
Young  men  secure  and  if  they  wanted  to  marry  they  could  do  so 

would  not  leave  with  safety,  if  they  were  given  assurance  that  they 
farms  if  assured  would  have  time  enough  to  earn  the  price  of  the  farm 
of  future  out.  Of  the  soil,  present  conditions  would  be  entirely 

reversed.  Then  the  opportunity  for  the  enterprising  and  ambitious 
would  be  in  the  country,  especially  for  those  who  had  a  liking  for  farm 
life  and  an  understanding  of  what  it  required.  The  state  colonization 
systems  of  Denmark  and  Australia  have  made  special  provision  for 
young  men  and  the  large  percentage  of  colonists  under  thirty  years  of 
age  is  a  noteworthy  feature  of  their  closer  settlements.  Later  on  in 
this  report  a  recommendation  for  carrying  out  a  similar  policy  here 
will  be  made. 

OPPORTUNITIES  FOR  DIVERSIFIED  AGRICULTURE 

Another  need  of  California  is  a  large  extension  of  diversified  farming 
and  a  lessened  tendency  toward  single  crops.  No  section  of  this 
country  surpasses  California  as  a  place  to  breed  blooded  live  stock.  The 
winning  of  the  Grand  Championship  and  Reserve  Championship  at 
the  International  Live  Stock  Show  at  Chicago  this  year  by  two  steers 
bred  and  fed  in  California  has  demonstrated  to  the  world  the  accuracy 
of  this  statement.  The  opportunity  to  grow  green  feed  the  year  round, 
the  absence  of  extremes  of  heat  and  cold,  are  all  favorable  conditions. 
We  ought  to  be,  in  the  breeding  of  fine  stock,  the  source  for  the  United 
States  and  South  America  that  England  has  long  been  for  the  world. 
We  believe  that  this  result  can  be  achieved  if  stockbreeding  is  given 
systematic  encouragement. 


«— 2702S 


82  LAND    COLONIZATION   AND   RURAL    CREDITS. 


PART  V 
CONCLUSIONS   AND    RECOMMENDATIONS 

The  colonization  and  development  of  the  unpeopled  farm  lands  of 
California  is  of  such  importance  to  all  the  people  of  the  state  that  it 
Need  for  state  should  not  be  left  to  the  separate  action  of  landowners, 
land  settlement  but  should  be  shaped  in  part  by  the  carefully  thought 
policy  out  purposeful  action  of  all  the  people.  This  means 

that  the  state  should  have  a  land  settlement  policy  and  deal  with  this 
matter  as  a  public  problem. 

The  progress  being  made  by  other  nations  in  improving  agricultural 
methods,  in  uplifting  agricultural  workers  and  in  affording  all  who  are 
Other  countries  fitted  for  it  by  industry  and  character,  the  opportunity 
have  a  lesson  to  enjoy  landed  independence  has  a  lesson  for  this 
for  us  country  which  ought  not  be  ignored.  Such  progress  is 

making  other  countries  better  places  to  live  in,  increasing  their  indus- 
trial efficiency  and  their  political  and  social  strength,  and  making  them 
dangerous  commercial  competitors.  We  do  not  believe  that  this  coun- 
try will  be  content  to  let  older  nations  surpass  us  in  those  things  which 
contribute  to  the  welfare  of  the  rural  masses.  Our  immense  unpeopled 
estates  give  us  an  opportunity  to  surpass  all  European  countries  except 
Russia  in  the  extent  of  rural  development.  Each  of  these  estates  is  a 
blank  leaf  on  which  we  may  write  whatever  record  we  choose. 

We  may  perpetuate  a  selfish  and  short-sighted  individualism.  We 
may  try  to  make  all  we  can  out  of  the  gifts  of  nature.  We  may  charge 
Selfish  everyone  who  comes  here  all  that  can  be  collected  for 

individualism  or  the  sunshine,  scenery,  society,  and  soil.  We  may,  by 
community  good?  extending  alien  tenantry  and  ignoring  the  social  needs 
of  farm  labor,  create  slums  in  the  country  while  we  collect  high  rents. 

Or  by  regarding  colonization  and  the  creation  of  rural  communities 
as  a  trust,  we  may  create  agricultural  colonies  filled  with  people  who 
will  make  this  a  state  where  the  best  people  in  this  country  will  want 
to  live.  We  may  only  do  this,  however,  if  the  diversion  of  our  rivers, 
the  selection  of  land  for  colonies,  and  the  methods  of  development  are 
planned  and  directed  by  the  best  thought  and  intelligence  of  the  time. 
We  shall  achieve  nothing  by  leaving  these  things  to  blind  chance. 

In  this  report  attention  has  been  called  to  undesirable  conditions  only 
when  it  was  necessary  to  show  the  manner  and  degree  in  which  private 
unregulated  colonization  has  failed  and  the  need  for  displacing  it  by 
something  wiser  and  better. 


LAND  COLONIZATION  AND  RURAL  CREDITS.  83 

STATE  SUPERVISION  OP  SETTLEMENT 

It  is  believed  that  every  interest  which  needs  consideration  would  be 
benefited  by  providing  for  state  supervision  of  colonization.  There  is 
some  difficulty  in  accomplishing  this  because  it  ought  not  to  embrace 
ordinary  sales  of  land  from  one  person  to  another,  but  only  include 
those  enterprises  which  assume  sufficient  magnitude  to  have  public 
importance  and  in  which  settlers  who  are  unacquainted  with  local  condi- 
tions are  sought  from  the  outside  or  from  a  particular  neighborhood. 
Such  supervision  should  aim  to  accomplish  the  following  results: 

1.  To  provide  that  adequate  attention  has  been  given  to  water  sup- 
plies and  drainage  in  irrigated  areas. 

2.  That  the  land  is  suited  to  the  purposes  for  which  it  is  being  sold. 

3.  That  there  is  no  misrepresentation  in  the  advertising. 

It  should  also  aim  to  aid  those  engaged  in  colonization  by  pointing 
out  features  in  the  plan  they  are  following  which  are  likely  to  lead  to 
Aim  and  result  of  failure.  Such  state  supervision  would  in  no  way 
state  supervision  hamper  development,  but  by  preventing  misrepresen- 
tation and  giving  new  colonization  enterprises  the  benefit  of  a  wider 
experience  would  protect  them  from  mistakes  and  also  safeguard  the 
settler. 

It  would  promote  development  by  strengthening  confidence  in  our 
advertising  statements  abroad,  but  it  will  not  of  itself  lead  to  the  adop- 
tion of  the  best  features  of  the  land  settlement  systems  of  other  coun- 
tries. Private  companies  will  not  give  the  terms  of  Denmark,  Germany, 
or  Australia  until  it  has  been  demonstrated  here  that  such  terms  can  be 
given  with  safety.  They  will  not  provide  homes  for  farm  laborers  until 
shown  that  these  homes  will  be  paid  for  and  be  a  community  asset.  No 
country  has  adopted  modern  settlement  methods  until  its  government 
took  the  initiative  and  showed  the  value  of  them.  We  can  not  expect 
California  to  be  an  exception. 

In  the  past  settlers  and  land  settlement  have  been  helped  by  the  large 
increase  in  land  prices  which  accompanied  development.  This  made 
More  generous  it  possible  to  borrow  money  for  improvements  or  to 
personal  credit  sell  a  part  of  the  original  purchase  for  nearly  the  first 
system  necessary  cost  of  the  whole  area.  This  aid  can  not  be  relied 
upon  in  the  future  and  we  must  replace  it  by  a  more  generous  personal 
credit  system  and  by  introducing  more  efficient  and  cheaper  methods  of 
preparing  farms  for  intensive  cultivation. 

The  experience  of  other  countries  and  of  some  colonization  enter- 
prises in  this  country  indicates  that  it  is  cheaper  for  an  organization 
having  ample  capital  to  level  and  seed  the  land  and  finance  the  building 
of  houses  than  to  leave  the  work  to  the  individual  settler. 


84  LAND    COLONIZATION    AND   RURAL   CREDITS. 

The  experience  of  other  countries  is  to  the  effect  that  a  longer  time 
in  which  to  pay  for  farms  than  has  been  given  in  California  is  desirable. 
Longer  terms  The  tendency  in  Canada  is  to  make  the  payment  period 
for  payment  not  less  than  twenty  years.  In  European  countries  it 
necessary  varies  from  thirty  to  seventy-five  years. 

The  following  suggestions  are  made  as  to  the  future  financing  of  set- 
tlers in  California : 

1.  Give  twenty  to  thirty  years'  time  in  which  to  pay  for  land. 

2.  After  the  initial  payment  require  no  further  payment  on  princi- 

pal for  the  first  two  years,  but  stipulate  in  the  selling^  contract 
the  character  of  the  improvements  which  must  be  made. 

3.  Have  the  payments  of  land  amortized  and  the  amount  of  the 

annual  or  semiannual  payments  equal  throughout  the  entire 
period. 

It  also  seems  desirable  that  the  state  should  aid  colonization  by  estab- 
State  bureaus  lishing  one  or  more  offices  in  the  state  where  infor- 
of  information  mation  regarding  land  in  approved  colony  enterprises 
could  be  obtained. 

The  state  might  also,  as  West  Virginia  is  now  doing,  distribute 
printed  lists  of  land  in  enterprises  that  are  approved,  giving  the  condi- 
tions of  settlement  and  the  kind  of  crops  which  might  be  grown. 

COLONIZATION  BY  THE  STATE 

It  is  believed  that  over  a  considerable  part  of  this  country  the  differ- 
ent states  will  soon  have  joined  other  enlightened  countries  in  making 
colonization  a  public  matter.  In  the  East  it  will  be  done  to  lessen 
tenant  farming  and  improve  agricultural  practices;  in  the  West  as 
the  best  method  of  rapidly  settling  unoccupied  and  uncultivated  land. 

The  tendency  towards  the  adoption  of  this  policy  in  the  West  is 
shown  by  the  decision  of  the  United  States  Reclamation  Service  to 
The  tendency  level  and  improve  farms  before  offering  them  for 
toward  state  settlement;  in  the  introductions  and  hearings  on  the 
settlement  in  Grosser  Bill,  which,  if  enacted,  will  go  farther  than 
this  country  even  Denmark  and  Germany  in  financing  settlers  on 

public  lands;  and  in  the  report  of  the  Cooperative  Land  Settlement 
Board  in  Wyoming,  which  has  recommended  that  the  federal  govern- 
ment build  irrigation  works  and  that  the  state  subdivide  the  land, 
select  the  settlers  and  finance  them  in  making  their  necessary  improve- 
ments. It  is  understood  that  this  report  has  the  support  of  the  state 
authorities  in  Wyoming  and  that  legislation  to  carry  it  into  effect  is 
being  framed. 


LAND   COLONIZATION   AND   RURAL    CREDITS.  85 

The  immense  area  of  land  in  the  large  estates  of  California  would 
make  progress  too  slow  if  it  depended  entirely  on  action  by  the  state, 
Possibility  of  DU*  the  state  can  do  more  than  any  other  single  influ- 
state  influence  ence  to  promote  the  adoption  of  right  policies  by 
in  California  making  a  demonstration  in  colonization  for  the  pur- 
pose of  showing  how  superior  carefully  thought  out  development  is  to 
that  where  only  local  or  immediate  benefits  are  considered. 

The  state  which  blazes  the  trail  in  scientific  colonization  will  secure 
a  prominence  and  establish  a  moral  leadership  that  will  be  of  great 
The  need  for  value  in  attracting  desirable  settlers.  No  state  has 
an  educational  more  to  gain  from  such  leadership  than  has  Cali- 
demonstration  fornia.  A  concrete  working  example  in  this  state  of 
by  the  state  ^he  methods  and  policies  which  have  transformed  rural 

life  and  immensely  improved  agricultural  practices  in  Denmark,  Ire- 
land, Germany,  Australia,  and  New  Zealand  would  do  more  than  any 
other  single  influence  to  insure  future  agricultural  progress  along  right 
lines.  In  no  other  way  can  the  owners  of  large  estates  be  so  effectively 
shown  what  to  do  and  what  to  avoid.  In  no  other  way  can  the  present 
tendency  to  create  here  a  great  alien  land  tenantry  be  more  certainly 
checked.  If  the  state  were  to  purchase,  subdivide,  and  settle  10,000 
acres,  its  action  would  be  watched  by  the  whole  world.  It  is  entirely 
feasible  to  mate  this  educational  demonstration  commercially  prof- 
itable. It  can  be  made  to  pay  its  way,  so  as  to  cost  the  taxpayer 
nothing.  Such  result  has  been  achieved  in  the  countries  whose  state 
systems  have  been  held  up  as  examples;  there  is  no  reason  to  doubt 
our  ability  to  be  equally  efficient  and  successful. 

DEMONSTRATION  SHOULD  BE  ON  A  COMMERCIAL  SCALE 
An  area  of  about  10,000  acres  is  suggested,  because  this  area  can  be 
more  economically  and  effectively  managed  than  a  smaller  one ;  and  its 
results  would  be  of  more  general  value.     A  larger  area  is  not  advised 
because  of  the  cost. 

Out  of  such  an  area  there  would  have  to  be  deducted,  let  us  say, 
300  acres  for  roads,  canals,  schoolhouses,  and  recreation  grounds;  100 
acres  for  farm  laborers'  allotments  and  a  few  small  orchards  and 
gardens.  This  would  leave  9,600  acres,  or  enough  for  about  two  hun- 
dred farms  varying  in  size  from  20  to  100  acres. 

If  these  two  hundred  farms  were  all  settled  by  alert,  ambitious 
young  men  and  women,  there  would  be  a  community  that  would  be  to 
agriculture  in  California  what  the  Greeley  Colony  was  to  irrigated 
farming  in  Colorado.  The  value  of  this  demonstration  would  be 
increased  by  restricting  settlement  to  qualified  applicants  between  the 
ages  of  eighteen  and  thirty,  men  of  experience  and  training,  no  one 


86  LAND   COLONIZATION   AND   RURAL    CREDITS. 

to  be  eligible  who  owns  farm  land  elsewhere  in  the  state,  nor  who  has 
not  had  at  least  one  year 's  farming  experience,  and  who  can  not  within 
six  months  become  an  actual  resident  and  cultivator  of  his  farm. 

In  planning  colonies  the  state  should  follow  the  main  working  fea- 
tures of  the  plans  which  have  succeeded  best  elsewhere.  We  believe 
that  if  the  plans  included  the  following  the  results  would  be  entirely 
satisfactory : 

The  land  to  be  sold  on  thirty-six  years'  time,  with  an  initial  cash 
payment  of  5  per  cent,  with  interest  payments  of  4£  per  cent  and 
amortized  annual  payments  of  principal  of  1£  Per  cent  beginning  at 
the  end  of  the  fourth  year,  the  settler  to  pay  for  his  land  and  have  a 
clear  title  in  the  payment  period  by  paying  4|  per  cent  on  the  cost  the 
first  four  years  and  6  per  cent  on  the  cost  the  remaining  thirty-two 
years.  Each  settler  should  be  required  to  have  capital  enough  to  pay, 
in  cash,  one-fourth  the  cost  of  all  improvements  made  by  the  state; 
payment  of  the  remainder  of  the  cost  of  improvements  to  be  amortized 
and  bear  the  same  interest  as  the  payments  on  land.  With  these  terms 
of  payment  for  land  and  improvements  it  is  believed  that  existing 
financial  institutions  can  give  whatever  credit  is  necessary  in  buying 
equipment,  including  dairy  cows. 

The  selection  of  colonists  should  be  entrusted  to  a  board,  the  subse- 
quent business  management  to  be  in  the  hands  of  a  single  competent 
The  features  of  superintendent  reporting  to  this  board.  The  State 
a  state  colony  Agricultural  College  should  make  systematic  provision 
for  giving  advice  and  information  regarding  farm  management  and 
cultivation.  The  superintendent  would  give  advice  about  buying  live 
stock  and  equipping  farms.  The  state  should,  by  contract,  build 
houses,  level  land  for  irrigation  or  loan  money  to  settlers  on  insurable 
improvements  carried  out  under  the  direction  and  to  the  satisfaction 
of  the  authorities  in  control,  a  conservative  maximum  limit  to  be  fixed. 

The  prices  of  farms  after  subdivision  should  be  so  adjusted  as  to 
pay  for  land  lost  in  roads  and  canals,  also  interest  on  the  cost  of  the 
land  between  time  of  subdivision  and  time  of  settlement  and  all  other 
incidental  expenses.  In  Australia  15  per  cent  was  sufficient  to  cover 
the  above  items. 

The  selection  of  the  land  should  be  entrusted  to  an  expert  committee, 
the  purpose  being  not  to  enhance  or  depress  prices,  but  to  buy  land  at 
its  productive  value.  If  this  were  understood,  it  would  be  a  guarantee 
to  settlers  that  they  were  getting  their  money's  worth.  The  character 
of  various  state  commissions  shows  that  there  will  be  no  difficulty  in 
the  appointment  of  one  in  whom  the  public  would  have  implicit  confi- 
dence, and  who  would  see  that  a  price  was  paid  for  land  which  would 
be  fair  to  landowners  and  settlers  alike.  The  land  might  be  paid  for 


LAND    COLONIZATION   AND   RURAL   CREDITS.  87 

with  state  bonds  bearing,  say  4  per  cent  interest,  or  bought  under  a  con- 
tract by  which  the  landowner  would  give  deeds  direct  to  the  settler, 
the  state  guaranteeing  his  payments  and  having  the  right  to  complete 
the  purchase  and  enter  into  full  ownership  at  any  time  deemed  advis- 
able. Existing  state  authorities  could  plan  the  works  for  a  water 
supply,  subdivide  the  area  and  fix  the  size  of  farms.  In  financing  the 
.settlers  the  amount  of  capital  to  be  provided  can  be  greatly  reduced  by 
making  full  use  of  the  loaning  possibilities  of  the  Federal  Farm  Loan 
Act. 

These  departures  from  the  methods  and  policies  under  which  the 
state  has  reached  its  present  wealth  and  greatness  are  in  accordance 
State  settlement  w^h  the  changing  tendencies  of  our  time.  Before  the 
in  accord  with  beginning  of  the  present  war  and  more  rapidly  since 
tendency  its  beginning  the  leading  nations  of  the  world  are 

organizing  all  their  resources  and  their  industries,  so 
as  to  eliminate  waste,  promote  efficiency  and  give  the  broadest  possible 
diffusion  of  opportunities.  Making  settlement  a  public  matter  and 
using  the  wisdom  and  experience  of  the  world  in  shaping  our  methods 
and  policies  will  not  only  attract  people  here,  but  will  do  more  to  make 
California  a  desirable  place  to  live  in  and  secure  a  better  use  of  our 
resources  than  can  be  accomplished  in  any  other  way. 

Respectfully  submitted. 

(Signed)  ELWOOD  MEAD,  Chairman. 
HARRIS  WEINSTOCK. 
DAVID  P.  BARROWS. 
MORTIMER  FLEISHHACKER. 
CHESTER  ROWELL. 

DAVID  N.  MORGAN,  Secretary. 


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